What is The Future of the American Automotive Industry

What Happened to the American Automotive Industry and How Can it be Fixed

The decline in American auto makers cannot be solely blamed on the auto makers alone. if anything, the United States Government played a huge role in why the auto makers had to reach out to them in the first place. Bad decision making and irresponsibility on behalf of the government is why that American auto makers git into a bind in the first place. With a combination of irresponsible government spending, Lack of sufficient loans and financial help from lending institutions and lack of government backing toward the automotive industry during times of the highest gas prices that this county has ever seen, it is no wonder the auto makers needed to be bailed out.

Health Care Problems Affected the American Automotive Industry

The American automotive industry fall-out between 2008-2010 happened because of various reasons that had nothing to do with auto making. Government health car problems, government credit problems and less efficient cars had the biggest impact on auto makers than any other aspect. One example of this is that GM Motor Corp. spends around 5-billion a year in health car costs for about 1.5 million employees. Ford and Chrysler spend about 90 billion dollars combined in health insurance for their employees. Health care costs alone add about $1,500 to the sale price of each vehicle. This is to make up for all of the money spent on excess health-care costs. When auto makers are spending more on health insurance costs for employees and yet not making a profit from selling under-valued, gas drinking automobiles, the automotive fall-out was bound to happen sooner than later.

Government Credit Problems Affected the Automotive Industry

Once the credit crisis of 2008 went into full bloom, banks and other financial institutions made it harder for people to obtain loans for the purpose of purchasing a vehicle. Vehicle sales dropped about 31% over the entire year of 2008. This caused auto makers to drop the prices of the automobiles. The drop in auto sales combined with people not being able to obtain loans put the biggest stressors on auto makers. Not only are auto makers not selling vehicles but the ones that they are selling are for little or not profit. Bad government decision making and Government irresponsibility helped American auto makers get into the slump that they were in.

Lack of Government Support for Energy Efficient Cars Affected the Automotive Industry

Instead of the United States Government helping American auto makers push for more energy efficient cars, they instead kept giving tax credits to consumers for purchasing SUVs. So now the American Automotive industry not only had to lower the costs of their vehicles and try to survive in a down sales market, the auto makers had to also continue SUV's during the worst gas hikes in American history. So, the auto makers had to deal with selling under priced SUV's in a down market during a market that included the highest gas prices ever. It is no wonder the American auto makers had to reach out just to survive during these short 2-years. There is a way to save the future of the American automotive industry, the only question is how? So, what is the future of the American automotive industry?

Closer Government and Auto Maker Relationships Will Save the Future of the Auto Industry

First and foremost, The United States Government must have a closer relationship with what is going on within the American automotive industry. If the Government is not going to help auto makers by backing them at times when their help, then we will see the same results of the automotive industry decline between 2008-2010. It is up the the United States Government to spur new loan programs and help with the promotion of more energy efficient vehicles especially during the times of higher gas prices. Gas prices will never be what they were before so why not build more energy efficient vehicles. This will allow auto makers to build vehicles, increase sales and still profit. Adding to that note, the Government must stipulate any and all creative methods for helping auto makers such as taking more control over all loans and financial support that is used to help the auto makers keep their heads above water, produce and sell energy efficient cars and make a profit. This means that the loans and support must stipulate that what happened last time does not happen again. No million dollar bonuses for auto executives and irresponsible spending on behalf of the auto makers. The government must control its end of the bargain when helping auto makers and auto makers must work with the government to ensure that the best built, most energy efficient vehicles are being built and supplied to the American public. This alone will strengthen the survival of the American automotive industry.

The Auto Industry Must Have More of a Take Charge Approach to Responsible Spending

Outside of the United States Government stipulation unnecessary bonuses and so forth, auto makers must use a more take charge affect in promoting and selling more energy efficient cars during a time when gas prices remain high. The American automotive industry knows how to build and sell automobiles more than anybody else. This is what they have done for many many years. It is up to the Government to help out with health insurance problems, loans and financial problems that prevent people from buying cars and help the auto makers support, promote and sell energy efficient cars other than providing tax breaks for gas guzzling SUV's and other large vehicles that will cause the American public to spend more on gas than groceries. Promoting and building energy efficient cars with the support of the government is the main step to bringing more stability to the relationship between auto maker and government. it will also be the biggest aspect in selling more automobiles. Once the auto makers and the government strengthen their relationship, promote, build and sell energy efficient cars, lower costs for auto maker employee insurance programs and combine that with the government taking charge over spending that directly affects the automotive industry in a negative way, then the future of the American automotive industry will strengthen.

The Bottom Line to the Future of the American Automotive Industry

For the sake and future of the American automotive industry, the Government must work with auto makers to come up with not only creative solutions but solutions that actually work. The Government must take care of uncontrollable and irresponsible spending that is causing credit problems that affect people getting loans and buying cars. The Government must find a way to decrease the amount of money that American auto makers must spend on employee health insurance. Maybe with the passage of the new health care bill, this might help auto makers in this department. Building and selling more energy efficient cars will help increase sales because energy efficient cars will bur less gas. In a high gas price time, energy efficient cars can help solve the problem of consumers spending so much money on fuel just to drive their cars. Common sense tells you that if the United States Government can control spending, spend money where it is needed, help American auto makers where it is needed, then the they will be in a position to help auto makers amend any loans and financial help and help with promoting and selling energy efficient vehicles that will help consumers spend less on car prices and spend less on gas prices and the auto makers will still profit. If all of these things happen, the future of the American automotive industry does look promising.