Auto Industry Bailout
The Macroeconomics of the Auto Industry Bailout
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The Auto Industry Bailout
Detroit, Michigan grew up around the automobile industry. At its peak, Detroit was the fifth-largest city in the United States, becoming the home to over 1.8 million people by 1950 (Davey, Monica 2013). The prolific population was due greatly to the success of the auto industry in the city. At that time, Detroit was flying high, its name coined “The Motor City” (americaslibrary.gov), and automobiles greatly impacted commercialization. From transporting goods to hastening production, to selling parts, to manufacturing and selling new automobiles, the auto industry completely transformed Detroit. Things seemed to be going well. Then, in the beginning of the 1980s things started to turn around. From year 2000 to 2010, Detroit’s population dropped another 25 percent, its census coming to only about 713,777 citizens (usatoday.com 2011). The once macro-industrial city revolving around the auto industry, turned into somewhat of a ghost town. Why was there such a downward turn?
The downfall began in the 1980s, when the auto industry took a plunge, raising unemployment rates in Detroit (Fein, Zach 2012). This resulted in thousands of empty homes and buildings, as people began to desert the city. The impact had been sizeable and continues to affect the city today; there are many parts of the city that are still not populated (Fein, Zach 2012). As a result Detroit had difficulty offering municipal services, including police and fire protection, good education, garbage collecting, snow removal, and lighting on the streets. This caused an increase in violence and crime since there were not enough police to protect the citizens.
This downfall came about because, GM, Chrysler, and Ford were paying a lot more too each worker than the foreign car companies. They were locked into deals with the unions, and had to pay benefits, healthcare, and pension
[Type the author name]
[Pick the date]
The Auto Industry Bailout
Detroit, Michigan grew up around the automobile industry. At its peak, Detroit was the fifth-largest city in the United States, becoming the home to over 1.8 million people by 1950 (Davey, Monica 2013). The prolific population was due greatly to the success of the auto industry in the city. At that time, Detroit was flying high, its name coined “The Motor City” (americaslibrary.gov), and automobiles greatly impacted commercialization. From transporting goods to hastening production, to selling parts, to manufacturing and selling new automobiles, the auto industry completely transformed Detroit. Things seemed to be going well. Then, in the beginning of the 1980s things started to turn around. From year 2000 to 2010, Detroit’s population dropped another 25 percent, its census coming to only about 713,777 citizens (usatoday.com 2011). The once macro-industrial city revolving around the auto industry, turned into somewhat of a ghost town. Why was there such a downward turn?
The downfall began in the 1980s, when the auto industry took a plunge, raising unemployment rates in Detroit (Fein, Zach 2012). This resulted in thousands of empty homes and buildings, as people began to desert the city. The impact had been sizeable and continues to affect the city today; there are many parts of the city that are still not populated (Fein, Zach 2012). As a result Detroit had difficulty offering municipal services, including police and fire protection, good education, garbage collecting, snow removal, and lighting on the streets. This caused an increase in violence and crime since there were not enough police to protect the citizens.
This downfall came about because, GM, Chrysler, and Ford were paying a lot more too each worker than the foreign car companies. They were locked into deals with the unions, and had to pay benefits, healthcare, and pension