Changes

The '''automobile''', or '''car''', was invented in the 19th century by [[Karl Friedrich Benz]], a [[Germany|German]] engineer. But it was [[Henry Ford]], an [[American]], who made the automobile popular by mass-producing it on the world's first moving automotive [[assembly line]] in [[Detroit]], which became the "Automobile Capital of the World" by 1910.

The '''automobile''', or '''car''', was invented in 1885 by Karl Friedrich Benz, a German engineer. But it was [[Henry Ford]], an American, who made the automobile popular by mass-producing it on the world's first moving automotive [[assembly line]] in [[Detroit]], which became the "Automobile Capital of the World" by 1910.

The term "car" covers a wide variety of vehicles from "micro-city" cars to full sized body on frame pickup trucks.  They have become essential transportation. As an expensive status symbol they are widely [[Car color popularity|customizable]].   

The term "car" covers a wide variety of vehicles from "micro-city" cars to full sized body on frame pickup trucks.  They have become essential transportation. As an expensive status symbol they are widely [[Car color popularity|customizable]].   

The automobile industry forced nations, starting with the U.S., to develop good streets and roads.  In the U.S. especially the industry created a vast network of new and used car dealers, repair shops, and gas stations, not to mention GPS devices, motels, drive-through windows, shopping malls, and many businesses catering to customers in autos.  The auto gave consumers a much wider geographical range, leading to the decline of isolated rural stores and the rise of small cities as regional market centers.  Automobiles enabled employees to commute to work without reference to buses, trolleys or trains, opening up the suburbs to settlement after 1945. Automobiles also added pollution to the air and caused traffic accidents with many fatalaties. The nation responded by motorizing its police forces and ambulance services.

The automobile industry forced nations, starting with the U.S., to develop good streets and roads.  In the U.S. especially the industry created a vast network of new and used car dealers, repair shops, and gas stations, not to mention GPS devices, motels, drive-through windows, shopping malls, and many businesses catering to customers in autos.  The auto gave consumers a much wider geographical range, leading to the decline of isolated rural stores and the rise of small cities as regional market centers.  Automobiles enabled employees to commute to work without reference to buses, trolleys or trains, opening up the suburbs to settlement after 1945. Automobiles also added pollution to the air and caused traffic accidents with many fatalities. The nation responded by motorizing its police forces and ambulance services.

 

 

The [[Recession of 2008]] saw auto sales plunge by a third, leaving GM and Chrysler close to bankruptcy.  They were rescued, temporally, by President [[George W. Bush]] in December, 2008, in order to avoid a major economic disaster that would cost the nation hundreds of thousands of jobs.

== Manufacture ==

== Manufacture ==

Major car companies include Ford, General Motors(or GM), [[Chrysler]], [[Toyota]], [[Nissan]], [[Honda]], [[Mazda]], [[BMW]], [[Mercedes-Benz]]. Major American based manufacturers include [[Ford Motor Company|Ford]] and [[General Motors]], produce several brands such as [[Ford Mercury|Mercury]], [[Lincoln (car)|Lincoln]], [[Chevrolet]], and [[Hummer]], however these often have many of the same "platforms" or basic car components.

Major car companies include Ford, General Motors(or GM), [[Chrysler]], [[Toyota]], [[Nissan]], [[Honda]], [[Mazda]], [[BMW]], [[Mercedes-Benz]]. Major American based manufacturers include [[Ford Motor Company|Ford]] and [[General Motors]], produce several brands such as [[Ford Mercury|Mercury]], [[Lincoln (car)|Lincoln]], [[Chevrolet]], and [[Hummer]], however these often have many of the same "platforms" or basic car components.

==Industry trends==

==Industry trends==

The annual capacity of the industry is 17 million cars; sales in 2008 dropped to an annual rate of only 10 million vehicles made in the U.S. and Canada. All the automakers and their vast supplier network account for 2.3% of the U.S. economic output, down from 3.1% in 2006 and as much as 5% in the 1990s. Some 20% of the entire national manufacturing sector is still tied to the automobile industry.  The transplants can make a profit when sales are at least 12 million; the Big Three when sales are at least 15 millio.<ref> Louis Uchitelle, "If Detroit Falls, Foreign Makers Could Be Buffer," [http://www.nytimes.com/2008/11/17/business/economy/17impact.html?_r=1&hp&oref=slogin ''New York Times,'' Nov. 16. 2008] </ref>

The annual capacity of the industry is 17 million cars; sales in 2008 dropped to an annual rate of only 10 million vehicles made in the U.S. and Canada. All the automakers and their vast supplier network account for 2.3% of the U.S. economic output, down from 3.1% in 2006 and as much as 5% in the 1990s. Some 20% of the entire national manufacturing sector is still tied to the automobile industry.  The transplants can make a profit when sales are at least 12 million; the Big Three when sales are at least 15 million.<ref> Louis Uchitelle, "If Detroit Falls, Foreign Makers Could Be Buffer," [http://www.nytimes.com/2008/11/17/business/economy/17impact.html?_r=1&hp&oref=slogin ''New York Times,'' Nov. 16. 2008] </ref>

The "Big Three" (General Motors, Ford and Chrysler) have done poorly in recent years.  They have lost most of the market to imports and "transplants" (cars made in U.S. factories owned by foreign makes).  The first signs came when Volkswagen and Honda started importing cheap, well-made cars in the 1960s. Detroit convinced Congress to impose quotas, and the foreign companies responded by opening their own plants in the U.S.   

The "Big Three" (General Motors, Ford and Chrysler) have done poorly in recent years.  They have lost most of the market to imports and "transplants" (cars made in U.S. factories owned by foreign makes).  The first signs came when Volkswagen and Honda started importing cheap, well-made cars in the 1960s. Detroit convinced Congress to impose quotas, and the foreign companies responded by opening their own plants in the U.S.   

The Big Three had in recent years stressed expensive, fuel-guzzling SUVs and large pickups. They were much more profitable than smaller, fuel-efficient cars. When gasoline prices shot past US$4 per gallon in 2008, Americans stopped buying the big cars, and the Big Three saw their sales plummet.  The [[Financial Crisis of 2008]] played a role as no one was willing to loan GM the money to buy Chrysler. Consumer credit has tightened and it became much harder for people with average or poor credit to obtain a bank loan to buy a car, so sales fell further.  Stock prices fell as shareholders worried about bankruptcy; GM's shares fell to 1942 levels.  

The Big Three had in recent years stressed expensive, fuel-guzzling SUVs and large pickups. They were much more profitable than smaller, fuel-efficient cars. When gasoline prices shot past US$4 per gallon in 2008, Americans stopped buying the big cars, and the Big Three saw their sales plummet.  The [[Financial Crisis of 2008]] played a role as no one was willing to loan GM the money to buy Chrysler. Consumer credit has tightened and it became much harder for people with average or poor credit to obtain a bank loan to buy a car, so sales fell further.  Stock prices fell as shareholders worried about bankruptcy; GM's shares fell to 1942 levels.  

Intense debate in December 2008 focused on allowing bankruptcy or injecting billions more of federal aid in a massive bailout; it would be in addition to a $25 billion loan Congress passed in September 2008 to assist in increasing fuel efficiency.  The Democrats in Congress supported president Bush's proposal to sue the fuel-efficiency loans to help with the immediate problem. It passed the Hosue but Senate Republicans brioke with Bush and it failed.  The opponents called for a bankruptcy that would allow GM to get out of its contracts to pay union members high wages, as well as generous pensionsand medical benefits to retired workers.  Bush then acted unilaterally and decided to use [[Financial Crisis of 2008|TARP money]] to bail out GM and Chrysler, on December 19. GM and Chrysler will get $13.4 billions in loans they can use to pay their suppliers.<ref> GM and Chrysler will receive $4 billion each when they sign the loan agreements with the Treasury. GM will have access to an addition $5.4 billion on Jan. 16 and another $4 billion on Feb. 17 provided that Congress has released the remaining $350 billion for the Treasury’s TARP rescue program. </ref> GM can receive another $4 billion in February, but by then the Obama adminsitration will be in charge, and it is emphasizing the need for a long-range solution.<ref>David E. Sanger, David M. Herszenhorn and Bill Vlasic, “Bush Aids Detroit, but Hard Choices Wait for Obama,” [http://www.nytimes.com/2008/12/20/business/20auto.html?hp ''NewYork Times'' Dec. 19, 2008]</ref>  

Intense debate in December 2008 focused on allowing bankruptcy or injecting billions more of federal aid in a massive bailout; it would be in addition to a $25 billion loan Congress passed in September 2008 to assist in increasing fuel efficiency.  The Democrats in Congress supported president Bush's proposal to sue the fuel-efficiency loans to help with the immediate problem. It passed the House but Senate Republicans broke with Bush and it failed.  The opponents called for a bankruptcy that would allow GM to get out of its contracts to pay union members high wages, as well as generous pension sand medical benefits to retired workers.  Bush then acted unilaterally and decided to use [[Financial Crisis of 2008|TARP money]] to bail out GM and Chrysler, on December 19. GM and Chrysler will get $13.4 billions in loans they can use to pay their suppliers.<ref> GM and Chrysler will receive $4 billion each when they sign the loan agreements with the Treasury. GM will have access to an addition $5.4 billion on Jan. 16 and another $4 billion on Feb. 17 provided that Congress has released the remaining $350 billion for the Treasury’s TARP rescue program. </ref> GM can receive another $4 billion in February, but by then the Obama administration will be in charge, and it is emphasizing the need for a long-range solution.<ref>David E. Sanger, David M. Herszenhorn and Bill Vlasic, “Bush Aids Detroit, but Hard Choices Wait for Obama,” [http://www.nytimes.com/2008/12/20/business/20auto.html?hp ''NewYork Times'' Dec. 19, 2008]</ref>  

In addition to the Big Three hundreds of large suppliers of parts are in financial crisis as well; most would go under if the Big Three go bankrupt.

In addition to the Big Three hundreds of large suppliers of parts are in financial crisis as well; most would go under if the Big Three go bankrupt.

===Bankruptcy scenario===

===Bankruptcy scenario===

Bankruptcy of the Big Three would be very expensive to the economy as a whole and the federal government. It would mean loss of 240,000 very high paying jobs at the Big Three, a loss of 980,000 high-paying jobs at the suppliers and local dealers, and 1.7 million jobs throughout the economy.  It would cause a decline in personal income of $151 billion the first year, and $398 billion over three years.  The federal, state and local governments would lose tax revenue and spend on welfare programs a total of $156 billion over three years.<ref> CAR Research Memorandum. "The Impact of the U.S. Economy of a Major Contraction of the Detroit Three Automakers" (Nov 2008) [http://www.cargroup.org/documents/FINALDetroitThreeContractionImpact_3__000.pdf online edition]</ref>

Bankruptcy of the Big Three would be very expensive to the economy as a whole and the federal government. It would mean loss of 240,000 very high paying jobs at the Big Three, a loss of 980,000 high-paying jobs at the suppliers and local dealers, and 1.7 million jobs throughout the economy.  It would cause a decline in personal income of $151 billion the first year, and $398 billion over three years.  The federal, state and local governments would lose tax revenue and spend on welfare programs a total of $156 billion over three years.<ref> CAR Research Memorandum. "The Impact of the U.S. Economy of a Major Contraction of the Detroit Three Automakers" (Nov 2008) [http://www.cargroup.org/documents/FINALDetroitThreeContractionImpact_3__000.pdf online edition]</ref>

The auto industry developed late in Britain and for the first half of the 20th century the small output of British-owned companies focused on luxury and upscale models notably  Rolls-Royce and  later Bentley as well as Jaguar and Rover.  The stress was on high quality hand-made craftsmanship, regardless of high cost.   

The auto industry developed late in Britain and for the first half of the 20th century the small output of British-owned companies focused on luxury and upscale models notably  Rolls-Royce and  later Bentley as well as Jaguar and Rover.  The stress was on high quality hand-made craftsmanship, regardless of high cost.   

Beginning 1925 William Morris, later Viscount Nuffield, began to mass produce small cars of modest power under the "M.G." nameplate. Morris modeled his methofds after [[Henry Ford]], and sought high volume production of inexpensive cars geared to the urban middle class. In 1953 M.G. merged with Austin to form the British Motor Corporation, the largest  producer, which also produced the Austin, Austin-Healey, Morris,  Riley, Wolseley. It added Jaguar in 1966. BMC specialized in small, economy sedans and sports  cars, with 4 cylinder engines. It merged in 1968 with rival Leyland.  Another rival was the Rootes group, with the brands Sunbeam, Talbot, Hillman, Singer, and Humber. <ref> Timothy R. Whisler, ''The British Motor Industry, 1945-1994: A Case Study in Industrial Decline'' (1999)  </ref>

Beginning 1925 William Morris, later Viscount Nuffield, began to mass produce small cars of modest power under the "M.G." nameplate. Morris modeled his methods after [[Henry Ford]], and sought high volume production of inexpensive cars geared to the urban middle class. In 1953 M.G. merged with Austin to form the British Motor Corporation, the largest  producer, which also produced the Austin, Austin-Healey, Morris,  Riley, Wolseley. It added Jaguar in 1966. BMC specialized in small, economy sedans and sports  cars, with 4 cylinder engines. It merged in 1968 with rival Leyland.  Another rival was the Rootes group, with the brands Sunbeam, Talbot, Hillman, Singer, and Humber. <ref> Timothy R. Whisler, ''The British Motor Industry, 1945-1994: A Case Study in Industrial Decline'' (1999)  </ref>

Ford opened a plant as early as 1911 and soon had 40% of the British market. In 1931 Ford opened the largest auto plant in Europe near London. Ford eventually acquired  Aston Martin, Jaguar and Land Rover. By 2008 it was selling off those divisions.<ref> Huber Bonin, et al. ''Ford, 1902-2003: The European History'' 2 vol Paris 2003. ISBN 2-914369-06-9</ref>  Rootes was taken over by Chrysler in the late 1960s and its brands phased out by the 1970s.  The Chrysler operations were taken over by Peugeot in 1978.  Nissan opened a plant in 1986.

Ford opened a plant as early as 1911 and soon had 40% of the British market. In 1931 Ford opened the largest auto plant in Europe near London. Ford eventually acquired  Aston Martin, Jaguar and Land Rover. By 2008 it was selling off those divisions.<ref> Huber Bonin, et al. ''Ford, 1902-2003: The European History'' 2 vol Paris 2003. ISBN 2-914369-06-9</ref>  Rootes was taken over by Chrysler in the late 1960s and its brands phased out by the 1970s.  The Chrysler operations were taken over by Peugeot in 1978.  Nissan opened a plant in 1986.

When the domestic auto industry was largely nationalized in 1975, British Leyland was the holding company that controlled 40% of production.  It was renamed Rover; it went bankrupt in 2005, ending the era of mass production by British makers. The Chinese purchased the MG brand, while Jaguar went first to Ford and now to TATA Motors.

When the domestic auto industry was largely nationalized in 1975, British Leyland was the holding company that controlled 40% of production.  It was renamed Rover; it went bankrupt in 2005, ending the era of mass production by British makers. The Chinese purchased the MG brand, while Jaguar went first to Ford and now to TATA Motors.

The gentry who bought cars before 1939 found driving was easy on rural Britain’s smooth road surfaces in its generally mild weather. The rural roads are famously narrow and winding, so cars were small with stiff springs for good handling characteristics on them. High taxes on gasoline aand crowded streets encouraged smaller, fuel-efficient cars in the cities.

The gentry who bought cars before 1939 found driving was easy on rural Britain’s smooth road surfaces in its generally mild weather. The rural roads are famously narrow and winding, so cars were small with stiff springs for good handling characteristics on them. High taxes on gasoline and crowded streets encouraged smaller, fuel-efficient cars in the cities.