Should we bail out the big 3? GM is obviously about dead. Chrysler's on life support and Ford is like the old man awaiting the inevitable. But before we answer that, here's a recap: after blowing huge chunks of money in the late 90s and early 2000s and structuring its production around gas guzzling SUV and other gas-nightmares, GM hit a snag in 2006 when people started feeling the gas pinch. Soon thereafter, people stopped buying GM monster-trucks and began to pursue more lucrative
foreign cars such as Toyota (which recently became the world's number 1 automaker) and Honda. Meanwhile, gas guzzlers in the American Big Three (Ford, Chrysler and GM) soon found themselves without an impressive sales report and knew that they would all soon be running into the red. Flash-forward to 2007.
Amid the impending doom of the bursting of the Housing bubble and the ever increasing number of home foreclosures (oh! lets not forget the credit crunch- yeah, that piece of plastic people actually forgot represented money) the economy began to slump. This, along with the actual rising rates from adjustable rate mortgages and the lack of cash on hand, sparked a fear in people - a fear associated with making any purchases over fifty dollars or anything long term. Anything say, like a car. Perhaps things would have smoothed out, but life had a different plan and as the markets tumbled into 2008, unemployment rose (now by 6.5%), foreclosure's skyrocketed (into the millions) and more and more people were now going on unemployment benefits (over 500,000 in Oct.). *sigh, well now we can move onto September 2008. Basically at this point the country was on the verge of a breakdown. Fannie Mae and Freddie Mac were about to go under and needed to be saved. Jobs were being slashed from major companies left and right, there was no relief from the housing crisis and it was obvious to everyone that the country was in a bad recession.
GM, Ford and Chrysler had all posted sharp losses and continued to scale back production among other things to free up some capitol. Soon we reached October, where we witnessed the fall of American giants when it came to financial institutions. Since virtually all of them were facing severe crises and threatening to drain the FDIC of its funds, the Treasury department decided to ask some companies to merge in order to save itself. Bank of America, still reeling from the acquisition of Countrywide financial now was asked to purchase Merrill Lynch for nothing. Washington Mutual was seized by the government OIC and went through the FDIC, causing the largest bank failure in US history. What was left of it was sold to JP Morgan. Finally, Wachovia about to go under was bought out by Wells Fargo. That left the unfortunate Lehman Brothers which closed since no one wanted to acquire it (and most of the workers were subsequently laid off). Congress then passed (alebit not without failed attempts and drama) the Emergency Economic Stabilization act (1o/3) was passed loaning the Treasury department $700 Billion for their Troubled Assets Relief Program (TARP) to loan out to Banks in hopes that they would lend money out...something which has yet to happen. Okay this is too long so im splitting it up, part II coming up!
Amid the impending doom of the bursting of the Housing bubble and the ever increasing number of home foreclosures (oh! lets not forget the credit crunch- yeah, that piece of plastic people actually forgot represented money) the economy began to slump. This, along with the actual rising rates from adjustable rate mortgages and the lack of cash on hand, sparked a fear in people - a fear associated with making any purchases over fifty dollars or anything long term. Anything say, like a car. Perhaps things would have smoothed out, but life had a different plan and as the markets tumbled into 2008, unemployment rose (now by 6.5%), foreclosure's skyrocketed (into the millions) and more and more people were now going on unemployment benefits (over 500,000 in Oct.). *sigh, well now we can move onto September 2008. Basically at this point the country was on the verge of a breakdown. Fannie Mae and Freddie Mac were about to go under and needed to be saved. Jobs were being slashed from major companies left and right, there was no relief from the housing crisis and it was obvious to everyone that the country was in a bad recession. 
GM, Ford and Chrysler had all posted sharp losses and continued to scale back production among other things to free up some capitol. Soon we reached October, where we witnessed the fall of American giants when it came to financial institutions. Since virtually all of them were facing severe crises and threatening to drain the FDIC of its funds, the Treasury department decided to ask some companies to merge in order to save itself. Bank of America, still reeling from the acquisition of Countrywide financial now was asked to purchase Merrill Lynch for nothing. Washington Mutual was seized by the government OIC and went through the FDIC, causing the largest bank failure in US history. What was left of it was sold to JP Morgan. Finally, Wachovia about to go under was bought out by Wells Fargo. That left the unfortunate Lehman Brothers which closed since no one wanted to acquire it (and most of the workers were subsequently laid off). Congress then passed (alebit not without failed attempts and drama) the Emergency Economic Stabilization act (1o/3) was passed loaning the Treasury department $700 Billion for their Troubled Assets Relief Program (TARP) to loan out to Banks in hopes that they would lend money out...something which has yet to happen. Okay this is too long so im splitting it up, part II coming up!
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