Need Some Ideas: (College Research Paper: American Auto Manufactures)

[almcbri]

I am working on a research paper for a junior english college class and I need some help from anyone who can give me information about the fall in N. American auto makers.

One thing I ask that this does not get turned into a heated discussion, I just need a better understanding of how & why the sales are down and what the plans are in the future:

The reason I am asking, I feel as though some of the articles I have found are from the the large automanufactures voice. Those comments are maybe not telling the whole story. Could be for many reasons, but I figure keeping stock from falling could be a reason.

I have found some good information so far, but still need a bit more. When did sales start dropping? Was it due to 9/11? I have found some information saying that was a reason, but I honestly can't recall when the declines started.

Thanks in Advance for any information.

Andrew

[BC69]

I don't think you can really pinpoint the time in which sales began to drop, it has been ever increasing over a period of time. I read an article today in the Wall Street Journal about Mercedes Benz, and trying to regain the top spot after some reliability issues. They stated that is is easy to fix the actual mechanical reliability problems, but its alot hard to fix peoples opinions after that. The US auto manufacturers have faced that exact problem.

What I believe has been the biggest issue behind their current decline is not a drop in sales, but an increase in the liabilities of the company. Insurance and pention benefits have skyrocketed. The "Jobs Bank" has become a 10 billion dollar liability and is only getting worse as they cut more workers. It is outdated and needs to be slashed. So I would say the number one reason is the increase in worker liabilities that they need to cover, and because of this, they began making less and less off of each car.

Another big reason is their inventory and manufacturing plans of the past. It was always cheaper to build as many cars as possible, rather than pay idle workers on the line. This backfired because as sales dropped they began to have to pay for huge inventory, especially with the SUV and truck lines. The cars were not selling, but they continued to make them at a high rate because they did not want to pay for workers to do nothing. This is beginning to change now because they are adopting "Just in time" Inventory and only building what they know they can sell. This results in cutting assembly line workers and plants, because they no longer are trying to build as much as possible, but as much as they can sell instead. In the short term this hurts the workers and looks bad, but it is a good strategy I believe. Once they get a good product line out there, to use a form of "just in time" inventory they will make more money off of each car.

Overall this is a long time coming, and consolidation is necessary for the US companies.

MY FINAL THOUGHT: This is a lapse in the business cycle...they will be back on top, for many reasons I wont get into...but they will be. So BUY THE STOCK!!! and the Bonds...they are Junk grade right now so they are selling at discount...10 years we can resell them for premium plus get 10 years of coupon payments off of them.


Hope it helps
Tim

[camaro_kyle]

I think your topic might be too broad. There are so many arguments and factors which can in one way or another be attirbuted to the fall of American auto sales. Depending on how long your paper is and how detailed you want to get, I would focus on one specific area and argue how it directly caused or was a main factor in the demise of the north American auto industry. For example, argue how 9/11 was the main cause of the auto industry. You could then relate that to the war on terror/oil in Iraq, gas prices here in the US, stock market fluctuation caused by the attack, etc.
Just a thought
Kyle

[almcbri]

yeah, I have already realized that I could right a masters thesis on this subject.
I was looking for a direction to take my paper when I wrote this earlier today. However, I knocked out some good information this evening and feel as though it is going to turn out well. It is due friday along with a speech, but I should be ok.

Kyle and Tim, thanks for the ideas.