Milestone 2

Economic future 1 and changes to milestone 1 recommendations (Kiy) *Recession*

The U.S. economy has for a long time enjoyed a healthy economy however in 2008 begun suffering from a downturn in the economy due to the housing market and troubles of the automotive industry. With one of the major U.S. automotive companies facing collapse and several financial institutes failing the economy went into a recession. According to McConnell, a recession is a period of decline in total output, income, and employment. Firms such as the automobile industry which produce consumer goods are affected most by the business cycle.

The automotive industry plays a major role in the U.S. economy. The ups and downs of the economy can have a positive or negative effect on the health of the automotive industry. Just as any other industry a recession can cause challenges for all stakeholders, including owners, employees, and suppliers. When consumers reduce production due to decreased sales auto companies will consequently reduce labor through lay offs. The cyclical impact of a recession trickles downs from the owners, employees to suppliers. Suppliers of materials and equipment to the automotive industry feel the results of a recession with reduced orders and late or non payment of goods provided.

In recession car dealerships such as Big Drive Auto should focus their sights on the future once the recession is over. Positioning the company in a manner in which they are ready to fulfill the needs of the consumer when they are ready to buy again. Big Drive Auto should focus its efforts on their service business. Consumers are going to hold on to vehicles during a recession and will need them service especially if they are older vehicles. The maintenance and upkeep of vehicles for consumers will become a priority because during the recession they are less inclined to purchase a new vehicle. Lastly, during the recession Big Drive Auto should temporarily remove any...