SHOULD WE BAIL OUT THE AUTO INDUSTRY?
Susan Helper, Ph.D. - AT&T Professor of Economics at Case Western Reserve University
Friday November 14, 2008
Crawford Hall - Room 9
Case Western Reserve University
Financial institutions failed first; could the American auto industry be next? At stake are not just jobs within those manufacturers, but millions of jobs in suppliers and other related businesses.
On a year-to-year basis, at the end of October GMís sales were down 20.3% from 2007, Fordís by 18.2%, and Chryslerís by 25.9%. For much of the year declines could be blamed mainly on high gasoline prices. Foreign manufacturers less reliant on sales of trucks and SUVs saw declines, but not so severe. Septemberís credit crunch, however, created a disastrous October. GMís sales in October were 45.4% less than in October of 2007; Ford down by 29.2%; Chrysler by 34.9%; and even Toyota and Honda sales declined by more than 20% compared to October of 2007. Now GM is spending $2 billion a month more than it earns, could run out of cash in mid-2009, and Ford and Chrysler are only in somewhat better shape.
The wider economic crunch threatens American automakers already vulnerable due to high pension and healthcare costs and their emphasis on low-mileage vehicles. It is easy to say their problems are in some sense their managementsí fault. But the same could be said of the financial institutions that proved too big to fail. President Obama has ďmade it a high priority for my transition to work on additional policy options to help the auto industry adjust, weather the financial crisis and succeed in producing fuel-efficient cars here in the United States of America.Ē But what might that entail, what could it cost, and can we be sure that it will work?
Come join us for a discussion led by CWRU Economics Professor Sue Helper, an expert in both the auto industry and outsourcing.
As usual, we will gather in Room 9 of the Inamori International Center for Ethics and Excellence, on the lower level of Crawford Hall, for free cookies, beverages, and brown bag lunch.
About Our Guest
When suppliers and customers or management and labor collaborate, how does it shape the economy? That’s the research topic of Susan Helper. Currently she is looking at how global supply chains affect regional development and innovation in the U.S., Mexico, and India. She is also examining a paradox in regional economic development. While the world is becoming more “flat” with goods and money flowing ever more quickly around the globe, local “clusters" of production in places such as Silicon Valley remain important. Sue’s research suggests that promoting networks within and between firms can lead to a highly productive economy, while maintaining community.
Friday Lunch Upcoming Topics and Speakers:
November 21: "The IRA and the U.S. Government." Discussion led by Matt Morrison, Irish peace process advocate, former IRA member incarcerated in Long Kesh prison, a resident of the United States for over two decades, and one of the former prisoners whose status was part of the Clinton administration's negotiations to encourage peace in Northern Ireland.
November 28: Thanksgiving Break
December 5: "Prospects for the Obama Administration.” Presidency scholar Doug Brattebo Ph.D. J.D., who currently serves as President of Corporate College of Cuyahoga Community College.
The Friday Lunch discussions are held on the lower (ground) level of
Crawford Hall. Visitors with mobility issues may find it easiest to take advantage of special arrangements we have made. On most Fridays, a few parking spaces in the V.I.P. lot in between Crawford Hall and Amasa Stone Chapel are held for participants in the lunch discussion.
Visitors then can avoid walking up the hill to the first floor of Crawford by entering the building on the ground level, through the garage area under the building. The further door on the left in that garage will be left unlocked during the period before the Friday lunch. On occasion, parking will be unavailable because of other university events.
For more information about these and other Center for Policy Studies programs, please see http://policy.case.edu.