Auto Term Paper Example | Topics and Well Written Essays - 1250 words

Auto - Term Paper Example The â€Å"Big Three† of the auto industry are known as Ford, Chevy and Chrysler. The Big Three are shadowed by smaller auto companies such as Toyota and Nissan. These auto companies together make up the auto industry. The auto industry is one of the largest job providers since it provides over one million jobs in the United States. In November of 2010 the auto industry provided over 700,000 jobs (Linebaugh2010). It takes a strong industry to be able to provide that many jobs. An industry of that size is dependent on being organized in a manner that allows managers and CEO’s the resources needed to make strong business decisions. Events Leading Up To a Struggling Auto Industry Many factors played a role in allowing the auto industry to decline into its current position. In 2008 gas prices jumped to over $4.00 a gallon for most of the United States (U.S. Bureau of Labor and Statistics2011). The rise in gas prices nearly halted the production of vehicles that got terrible gas mileage. Many Diesels, SUV’s and large Trucks were no longer popular. Many just could not afford to use the vehicles because of the price of gas. Smaller options better on gas mileage were a new trend. Since the vehicles were not being sold, there was less of a need to manufacture the vehicles. Less manufacturing meant for less income and decisions to slow and shut down many manufacturing facilities. Globalization has allowed the auto industry to target markets throughout the whole world and not just the United States. The auto industry was more focused on setting up manufacturing facilities in other parts of the world and somewhat neglecting issues that were happening in their home country. Many are upset about allowing jobs to go oversees and will not even buy new vehicles from the auto makers. Decisions made to globalize the auto industry have put a damper on U.S. sales, jobs and reputation. This type of damage takes a lot of re organizing in order to return to a happy medium where business can boom and customers are satisfied. Current Situation of the Auto Industry, What went wrong? The current situation of the auto industry is somewhat of a mess. Stocks for the auto industry have declined, auto makers have filed bankruptcy and production has been drastically reduced. Chrysler which is one of the big three auto makers filed for bankruptcy in April of 2009 (Isodore2009). This bankruptcy was a final attempt to try and save the auto maker. Even after receiving a large bail out from the government, Chrysler was still unable to clear its deficit. Chrysler is not the only company caught up the mess of the auto industry. Bad manufacturing by Toyota has caused for those in authority positions to be forced to rethink ethical decisions about the quality of vehicles manufactured. Toyota had over 100 issues of vehicles causing accidents by the gas pedals getting stuck. This type of problem has reduced sales and could have been prevented by being better orga nized in Toyotas safety department. It is apparent that being better organized and prepared for rising gas prices and a decline in sales could have stopped the hurt of the situation that the auto makers are currently in. Being better prepared could have reduced the need for a government bailout. It would have been in the auto maker’s best interest to address the issue at the first sight of declining sales rather than pretending as if the fallout was not going to happen. Prevention would have lessened the impact on the rest