The American automotive industry had an immense impact on the domestic economy for years, through the boom and bust years of the 20th century. In fact. the number of new cars sold annually was a reliable indicator of the nation’s economic health.
But in 2007-2008 when the recession hit, new car sales declined precipitously, reflecting the overall decrease in consumer spending.
Although Ford had a cash reserve of billions as a hedge against hard times, other automakers like Chrysler and General Motors (GM) faced bankruptcy and the United States government stepped in with bailout money from the Troubled Asset Relief Program (TARP) to rescue the sinking firms.
In early February 2012, the industry was enjoying a brisk recovery, and big profits were posted again. Ford, GM, and Chrysler, Detroit’s so-called “Big Three,” the classic OEM manufacturers, were flourishing. In 2012, American automaking companies reigned worldwide as the biggest and most profitable. Few could have foreseen the industry colossus which rose from its inauspicious origins more than a century earlier.
The invention of the automobile and the mass production techniques of Henry Ford, made the machine affordable. The American economy has been transformed by this key element in its prosperity.
Tens of thousands of jobs were created as the industry grew. Ford’s model Ts became the first most popular, affordable, mass produced cars.
The machine tool makers and steel industry also flourished as the automotive industry required supplies of components for the chassis, engines, and other metal fixtures of the cars. Beyond these basics, every car needed a battery, head lights, interior upholstery and paint. Entirely new businesses, or subsidiaries of existing business, were created to meet the needs of the automobile industry as it grew incrementally year after year