Global Car Industry Fearful for Detroit

Overseas operations have long helped carry the US car companies through hard times. But the current economic crisis is especially severe, as US car companies confront mounting health-care costs and reduced credit, an abrupt reduction in demand for oversized vehicles, volatile fuel prices which influence consumer choices, and a home base of customers who have sharply curtailed their expenditures. The collapse of an US automaker, like General Motors or Chrysler, would have a severe and indirect effect for overseas companies that manufacture parts, notes the director of the Center for the Automotive Research in German, as reported by Nelson Schwartz for the New York Times. “While it has been largely obscured in the current debate in Washington over aid to the ailing industry, Detroit and Europe are closely intertwined,” Schwartz reports, detailing other examples of product development, employment and sales. Even as bailouts for the industry are debated in Washington, government officials in Spain and Germany have already extended assistance to subsidiaries and suppliers owned by the US car companies. Government loans and support may help the companies survive as they adjust capacity to meet demand, while also developing products for consumers suddenly acutely concerned about saving both energy and money. – YaleGlobal