The Great Recession: US Automobile Industry's Bailout - Essay Sample

Introduction

The great recession of two thousand eight affected the whole economy of the United States. The stock market fell, and the houses were getting foreclosed. General Motors were not spared of the wrath of the recession. The company was on the verge of going under when the federal government came into play. They gave the automobile industry eighty million dollars to prevent the domestic automobile industry from going to waste. Many financial analysts and economic scholars were against this bailout. They reasoned that big firms would not be cautious in their risk-taking because they have the backing of the federal government ("Debating the Wisdom of the Automotive Industry 'Bailout'", 2012).

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Ultimately General motors have employed certain factors that have prevented their failure in the economic market. They have both tangible and intangible resources which have contributed to their success. For instance, they have plants in various parts of the world which ensure that the supply of their products is never cut off due to a fault in one plant. Their most prized possession is the intangible resource their name. General Motors have a well-known reputation in the automobile industry. The title helps increase the sales of the company.

General Motors are very crucial to the macroeconomic output of the United States of America and the world as a whole. The reason for this is that General motors have several plants in various parts of the globe ("How General Motors progressively evolved its business model over three decades", 2019). When the company profits the owners, workers and the federal and state government benefit from it. The workers are able to get more benefits, and the government can earn tax. And in turn, the workers spend more money in the economy, for instance in buying goods and services. By consuming it helps to improve the economy of the United States of America as a whole.

Conclusion

In conclusion, America needs to appreciate the automobile industry for its impact in the United States of America. Since the day henry ford invented the first domestic vehicle, it made it possible for people to afford cars. It revolutionized the whole economy of America. Thus, people should not be biased on General motors because it was bailed out by the government.

References

Debating the Wisdom of the Automotive Industry 'Bailout'. (2012), 110(2), 4-40. https://doi.org/10.1016/s0026-0576(13)70107-7How General Motors progressively evolved its business model over three decades. (2019), 35(6), 15-17. https://doi.org/10.1108/sd-03-2019-0054

Weber, C. (2016). What is Good for General Motors is Bad for America: The 2009 Bailout Through the Lens of Heskett's Design-Oriented Theory of Value. She Ji: The Journal Of Design, Economics, And Innovation, 2(3), 183-198. https://doi.org/10.1016/j.sheji.2016.11.001