During the recession starting in December of 2007, U.S. automakers were hit hard. The auto industry was fighting for its life as sales plummeted nationwide. In 2009, President Obama led the charge for a $80 billion bailout package that rescued General Motors, Ford, and Chrysler.
Six years later, about 17.5 million cars and trucks were sold. This was a record high, a remarkable recovery from the 10.4 million cars and trucks sold in 2009.
The sales record has been hailed as a victory for President Obama. A year ago, the president told workers at a Ford plant in Wayne, Michigan that “betting on you was the right thing to do. . . And that bet has paid off for America because the American auto industry is back.”
Motivated by cheap gas and an improving housing market, contractors and drivers bought larger trucks and SUVs. According to the Washington Post, “The Big Three (General Motors, Ford, and Chrysler) sold more than two million full-size pickups last year, more than double their sales in 2009. The Ford F-150 was America’s best-selling vehicle for the 34th year in a row.”
Brandi Hoffine, a White House assistant press secretary, said, “The continued strength of the American auto industry would not have been possible without the grit of American workers who persevered through tough times and the bold steps the president took to rescue the auto industry from the brink. It’s clear the president’s strategy worked.”
Challenges still remain. At the time of the bailout, a separate agreement between administration and industry executives was made to increase passenger-vehicle fuel efficiency to an average of 54.5 miles a gallon by 2025. However, instead of buying fuel-efficient cars, customers bought more gas-guzzling trucks, pickups, SUVs, and vans. The average fuel efficiency of new vehicles sold declined in 2015 to 25 miles a gallon.
How can a manufacturer increase fuel efficiency when consumers prefer to buy larger and heavier vehicles? Can new technology solve that problem? Will consumers change their car buying preferences if gasoline goes to $4.00 a gallon again? Will the government need to extend the deadline for meeting the fuel-efficiency goal of an average of 54.5 miles a gallon by 2025? Only time will tell. Meanwhile, let’s celebrate the remarkable turnaround of the U.S. automobile industry.
To see a video of a 1936 car assembly line filmed at the Chevrolet plant in Flint, Michigan, go to Fascinating 1936 Footage of Car Assembly Line at https://www.youtube.com/watch?v=HPpTK2ezxL0.
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