Economics 545

ECON 545 Research Paper

ECON 545 Research Paper Content Page

Introduction --------------------------------------------------------------------------------------------I Brief history of General Motors ---------------------------------------------------------------------II General Motors before the recession ---------------------------------------------------------------III How did the recession impact General Motors ----------------------------------------------------IV General Motors after the recession ------------------------------------------------------------------V Conclusion----------------------------------------------------------------------------------------------VI References----------------------------------------------------------------------------------------------VII

ECON 545 Research Paper Introduction I

The recession in the US began in the middle of 2007 as a result of the downfall of the subprime mortgage market, which resulted in what some described as the worse financial crises in more than seven decades. The US auto industry was hit very hard, the demand for new automobile declined significantly, which resulted in the steepest decline in car sales, production, and employment levels since World War II. Prior to the recession the auto industry had experienced two decades of solid performance, as a result of the recession combined sales of the Detroit big three: Chrysler Corporation, Ford Motor Company and General Motors Company declined from about 8.4 million vehicles in 2007 to less than 4.7 million in 2009, they also saw their combined market share reduced from 52 percent to 44 percent. By December 2008, the situation had deteriorated and General Motors joined forces with Chrysler and Ford to secure government to aid, proposing that failure could have devastating ripple effects. Subsequently on June 1, 2009 General Motors filed structured bankruptcy and received bailout through the government Troubled Assistance Relief Program...