Saving America's Automobile Industry: The Bailouts of 1979 and 2009, An Overview of the Economic Conditions, Factors for Failure, Government Interventions and Public Reactions

Author

Taylor A. Wall, Claremont McKenna CollegeFollow

Graduation Year

Fall 2010

Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts

Department

Government

Reader 1

Andrew Busch

Abstract

This paper will discuss the bankruptcies experienced by U.S. automakers in both 1979 and 2009. The main factors which led the automakers into financial ruin was the uncontrolled power of labor unions, the severe financial impact of oil embargos, the aggressive imposition of federal regulations and the increasing dominance of Japanese imports. After discussing these important factors, the paper will describe the specifics of Chrysler’s bailout experience in 1979 with the positive public acceptance of the government loans, largely due to the character of Lee Iacocca. After delving into Chrysler, this paper will explain the specifics of the government’s bailout of General Motors and Chrysler in 2009. The paper will also review the government’s position regarding the significant economic impact of letting the U.S. automakers fail. In conclusion, this paper will demonstrate that although the 1979 bailout was better perceived by the American public, the long term impact of 2009 bailout has the potential to produce a more strategic change in the U.S. auto industry.

Recommended Citation

Wall, Taylor A., "Saving America's Automobile Industry: The Bailouts of 1979 and 2009, An Overview of the Economic Conditions, Factors for Failure, Government Interventions and Public Reactions" (2010). CMC Senior Theses. 43.
https://scholarship.claremont.edu/cmc_theses/43