The Auto Industry Bailouts: Obama, Financial Crisis and Car Sales in the United States (2009-2010)



Beginning in the latter half of 2008, a global-scale recession adversely affected the economy of the United States. A combination of several years of declining automobile sales and scarce availability of credit led to a more widespread crisis in the United States auto industry in 2008 and 2009.

Following dramatic drops in automobile sales throughout 2008, each of the “Big Three” U.S. automakers — General Motors (GM), Ford Motor Company, and Chrysler — requested emergency loans in order to address impending cash shortages. By April 2009, the situation had worsened such that both GM and Chrysler were faced with imminent bankruptcy and liquidation. With the intent to prevent massive job losses and destabilizing damage to the entire manufacturing sector, the U.S. and Canadian governments provided unprecedented financial bailout ($85 billion) support to allow the companies to restructure and jettison legacy debt via Chapter 11 bankruptcy. Both companies separately filed for this protection by June 1.

General Motors emerged from bankruptcy as a new company majority owned by the United States Treasury, and Chrysler emerged owned primarily by the United Auto Workers union and by Italian automaker Fiat S.p.A.. Both companies terminated agreements with hundreds of their dealerships and GM discontinued several of its brands as part of bankruptcy proceedings. Ford Motor Company was able to survive without entering bankruptcy partly due to a large line of credit which it obtained in 2007.

The U.S. automakers were more heavily affected by the crisis than their foreign counterparts, such as Toyota. Following the 2000s energy crisis, the U.S. automakers failed to produce more fuel-efficient vehicles as opposed to the high-profit sport utility vehicles that were popular in the late 1990s and early 2000s which led to excess inventory and undesirable product. Since the automotive crisis abated, all three American automakers have increased sales of vehicles and have posted a profit.

As of 2012, the industry has recovered to some extent. GM had 2011 sales of more than 9 million vehicles, more than Toyota. According to a May 2011 report by the White House National Economic Council, however, the US government may have to write off about $14 billion of its $80 billion loan.

By 2012, polls from Pew Research Center and Quinnipiac University Polling Institute show that the American public now believes that the bailouts have been helpful for the American economy.

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Oh the joys of the open road!

Oh the joys of the open road!

Timeline of motoring history 1940 – 2008

1940
Car production in Britain is put on hold as most factories go over to munitions production.

The German Luftwaffe destroys the centre of Coventry.

Oldsmobile and Cadillac offer the first fully automatic transmission.

Enzo Ferrari leaves Alfa Romeo to establish Auto-Avio Costruzioni Ferrari.

In Japan, Toyo Kogyo produces its first passenger car.

1941
Lord Austin dies aged 74

Louis Chevrolet dies aged 63. He is buried at Indianapolis, scene of his greatest racing victories.

Packard are the first car manufacturer to offer air conditioning.

Chrysler introduces the Fluid Drive transmission, a manual transmission with a fluid coupling instead of a clutch.

1943
American passenger car production falls to just 139 vehicles as war production requirements take over.

1944
Volvo focus on occupant safety with the introduction of a safety cage.

Louis Renault is arrested and imprisoned for collaborating with the Germans. He dies at Fresnes prison in ‘suspicious circumstances’.

Enzo Ferrari’s Maranello workshops are bombed and destroyed.

1945
2nd World War in Europe ends with Germany’s unconditional surrender to the allies on May 7th.

In receivership since 1939, Triumph is acquired by Standard.

Petrol rationing in Britain continues.

Henry Ford resigns as president of The Ford Motor Company, handing over to his grandson, Henry Ford 11.

French President Charles de Gaulle nationalizes Renault and the company’s name is changed to Regié Nationale des Usines Renault.

The newly elected Socialist government ‘encourages’ manufacturers to export half their output. To counteract the consequential development of an illicit black-market car buyers are required to sign a covenant preventing the sale of new cars for one year.

1946

Newly designed post-war models are launched by British car makers Triumph, Armstrong-Siddeley, Jowett and Bentley as the British Motor Industry celebrates its fiftieth birthday.

Petrol ration for British motorists is increased by 50 per cent.

Ford of Britain produce their millionth car, an 8hp Anglia.

Michelin patent the Radial-ply tyre.

In light of negative wartime connotations William Lyons changes the name of SS Cars Ltd. to Jaguar Cars Ltd and begins to focus on export markets.

Enzo Ferrari rebuilds his bombed workshops and begins work on the development and production of the Ferrari 125 Sport. The first Ferrari hits the road!

1947
Packard offers power seats and windows across their range.

Ettore Bugatti dies in Paris aged 66.

The American car industry celebrates its Golden Jubilee.

Henry Ford dies at the age of 84.

BMW engine and car designs are ‘acquired’ by Bristol and Frazer-Nash as ‘war reparations’.

David Brown, already successful in the British engineering industry, sees an advertisement in The Times offering ‘A high-class motor business, established 25 years’ and pays £20.000 to buy Aston Martin. He has already purchased Lagonda, having owned a Lagonda Rapide himself in the past.

A new name, Standard-Vanguard, is introduced to the British public

Instead of taxing cars based on the 1906 RAC horsepower formula a flat- rate system is introduced.

Enzo Ferrari’s 125 Sport wins its first race. The …

How To Get Approved For A High Risk Motorcycle Loan And Financing

Are you in the market for a motorcycle, but have bad credit and need a high risk motorcycle loan? Well don’t worry the goal of this article is provide you everything you need to know about getting approved for a high risk motorcycle loan.

First you must understand how motorcycle lenders go about classifying you as high risk. On the average, when a motorcycle lender is looking to approve any motorcycle financing they have a much higher cut off in the credit score range than an auto lender. This exists whether you have good or bad credit.

So with that said an auto lender may approve a FICO credit score of 610 as not a high risk, but a motorcycle lender would most likely classify a FICO credit score of 610 as a high risk motorcycle loan and may not offer an approval on it.

There are two reasons for this:

1. Motorcycles are much harder to repossess in good condition than an automobile. As a result of this simple fact, if you default on your motorcycle loan it is a higher risk to the motorcycle lender than an automobile lender because it is much harder to repossess a motorcycle in good condition than a car.

With all the new motorcycle riders entering the industry there is a high incident of some form of minor or major damage on many motorcycles, which translates in to a lower amount per unit a lender gets when they repossess a motorcycle for a customer that chooses to get bad credit over paying for their motorcycle loan. The damage could be from the repossession agency or the actual owner but the simple fact is motorcycle fetch much less at repossession auctions than automobiles.

This simple fact is one reason good and poor credit motorcycle loans are offered at much higher interest rates than a car and has an overall lower approval percentages when compared with cars.

2. The average motorcycle tends to depreciate very fast. Since motorcycles have higher accident rates and there are many people who once they crash do not pay off their loan, this results in higher defaults for motorcycle lenders. This is another reason motorcycle loan rates are higher and motorcycles are hard to get approved for.

Ok, now that you have a background in how a motorcycle lender views a motorcycle loan, let’s look at how you can get approved for a high risk motorcycle loan.

Step one is to really understand your credit report and credit score. Sure if you are looking for high risk motorcycle financing, you probably have had some credit issues in the past. But you never know how those credit issues played out on your credit report until you get a copy of it.

Take a look and make sure everything reported on your credit report is actually true. See every year 1000s of people just like you find creditors made errors on their credit report, which negativity impacted their credit score. If your …