US Automakers Affect On The Economy

So, what is so special about the United States Automotive Business? Why should we be concerned about the bail out? Why not just let them go bankrupt.

Here is why:

The United States automotive industry is a major driving force of our economy. (Excuse the pun.) If you break it down, the products and services of companies like General Motors, Ford, and Chrysler have a direct relationship to the rise or decline of the Gross Domestic Product of our economy and therefore, much of the world’s economy.

Manufacturer’s arms spread out many different ways into the world economy bringing forth a vast network of suppliers and workers world wide to produce and sell vehicles. Just look at the different arms they have. There is; design, engineering, manufacturing, parts, distribution, transportation, marketing and advertising, service, finance and sales.

Over the last one hundred years, since the invention of the automobile, oil and gas companies, tire shops, independent service and repair facilities, body shops, aftermarket companies, auto auctions, towing and trucking companies, have emerged. Revenue and licensing departments have been created.

Whether you like it or not, your daily life is touched by the U.S. Automotive Industry in one way or another. When you jump into that taxi, go to the hospital in that ambulance, get a tow to your garage, have your milk or pizza delivered to your front door you are coming into contact with Chrysler, Ford and GM.

Also, think of all the GM, Ford and Chrysler vehicles in the federal, state and local Government fleets that are used to patrol our nations streets and serivce our utilities. Look at the badge on their vehicles. I do not see our police officers, FBI agents or state partol officers cruising around in a Toyota, Honda, Hyundai or Kia.

Hey, I just saw a News 7 van and it had a Ford badge on the front! Oh, and the home security truck that just drove past my house, it was a Chevy S-10.

FIRST: THE MANUFACTURER SETS THE STAGE

The automotive industry is a key industry to the viability of the United States Economy. The most recent data comes from the National Automobile Dealers Association 2006 annual report. In 2006 new light-duty sales exceeded 16.5 million units. Chrysler, General Motors and Ford accounted for 9,058,200 of those sales. (That is well over half of all new vehicle sales in 2006.)

What would it do to our economy if the Big Three ceased to exist?

To really see on how the U.S Automakers affect our economy watch this youtube video:

http://www.youtube.com/watch?v=72cHfOKoA1c&eurl

SECOND: DEALERSHIPS PLAY A CRUCIAL ROLE

Ultimately car dealerships play a crucial role in our local economy. According to the 2006 NADA report, “Total dealership sales in 2006 reached $675 billion dollars. They employ 1,120,000 employees with a payroll of nearly $52.9 billion. Dealership expenditures, excluding cost of goods sold, reached $81.5 billion.

FRANCHISED DEALER ACTIVITES INCLUDE:

• 1,120,100 Employees.
• 16.5 billion new vehicles sold.
• 19 billion used vehicles sold.
• 544,580 medium and heavy-duty trucks sold.
• 388,140 service stalls.
• $80.5 billion in service and parts.
• $9.3 billion in body work.
• $5.8 billion in parts inventory.

The NADA report goes on to say, "With many of these expenditures made locally, dealerships provided vital support to the economic well being of their communities. Franchised dealers were also major payers and generators of federal, state and local tax revenues as well as principal contributors of both time and money to local and regional charities.”

LASTLY: WHAT ABOUT QUALITY?

The quality of U.S. automakers have, in the 1970's, 80's and mid 90's been less desireable. However, in the past ten to fifteen years the Big Three's quality and customer satisfaction has risen to be 'on par' with foreign brands.

• In 2007 the Saturn Aura took the top honour of the 2007 International car of the year award. (Voted on by 49 independent automotive journalists.)
• In 2008 the Chevy Malibu was awarded 2008 International car of the year.
• According to JD Powers, "Jaguar ranks highest in satisfying buyers . . . Three other premium, or luxury, brands among those rankings near the top also earn 5 Power Circles for sales satisfaction. They are: Hummer, Lexus and Cadillac."
• According to JD Powers, "Non-luxury brands that earn 4 power circles and are considered better than most in terms of sales satisfaction are, :Buick, Chevrolet, Ford, GMC, Mercury, Pontiac and Saturn."

JD POWERS 2008 INITIAL QUALITY SURVEY: Seven of the sixteen brands above the industry average for Initial Quality are U.S. Automakers.

• Mercury (6th)
• Ford (8th)
• Cadillac (11th)
• Chevy (12)
• Pontiac (14th)
• Lincoln (15th)
• Buick (16th)

20 other brands fell below the industry average including, but not limited to: Acura, Kia, Nissan, BMW, VW, Scion and Mitsubishi.

JD POWERS 2008 SALES SATISFACTION INDEX: Twelve of the twenty-three brands above the industry average for Sales Satisfaction are U.S. Automakers.

• Hummer (2nd)
• Cadillac (4th)
• Lincoln (7th)
• Buick (9th)
• Mercury (10th)
• Saturn (11th)
• Pontiac (13th)
• Saab (14th)
• Chevy (15th)
• Ford (17th)
• GMC (18th)
• Chrysler (20th)

13 other brands fell below the average including, but not limited to: WV, Honda, Toyota, Scion, Subaru, Hyundai and Mitsubishi.

JD POWERS 2008 CUSTOMER SERVICE SATISFACTION: Eleven of the 21 brands above the industry average for Customer Service Satisfaction were U.S. Automakers.

• Cadillac (2nd)
• Buick (3rd)
• Lincoln (5th)
• Mercury (6th)
• Saturn (11th)
• Chevy (12th)
• GMC (13th)
• Saab (14th)
• Pontiac (15th)
• HUMMER (16th)
• Chrysler (21)

Sixteen other brands fell below the industry average including, but not limited to are: hyundai, Mitsubishi, Subaru, Toyota, Nissan, Scion, Kia and VW.

What does this all mean?

With a global economy, manufacturing, merchandising and marketing the U. S. Automakers have closed the gap on the imports. They still get a bad rap for what they were know for in the past, making low quality cars and trucks. Based on Inital Quality studies their product is as good as or better than the Imports. U.S. Automakers do have great sales satisfaciton and they know how to take care of their customers.

Truly, U.S. Automakers are needed to turn our struggling economy around.

Wake up and smell the coffee!