The US Automotive Industry is among the industries that experienced substantial losses due to the Euro Crisis. The crisis resulted to a decline in demand for cars, heightening the problem of surplus production capacity, which had hit the state ahead of the crisis. Besides, the US economy went down because many people who worked in the automotive industry lost their jobs. The main three industries in the US automotive sector, including Ford, Chrysler and General Motors (GM) experienced a decline in sales, due to lack of appropriate government policies to address the issue, as well as, lack of competent decisions by managers, in these Companies.
Since the Euro Crisis occurred, the problem of reduced sales has heightened, in the three key US automotive industries. The situation of the US automotive industry is exceptional, considering that the country was going through other inherent problems prior to the crisis. Failure to address these problems exposed the country to external threats and shocks. Some of these past, problems included competition from imports and rises in oil price. Even after the crisis, these problems remain unaddressed by the companies. Besides, lack of appropriate government policies has left US automotive industries susceptible to many threats.
How have managers of the US automotive industries tackled the problem of reduced sales in their industries?
Which are some of the policies that the US government uses to address the problem of decline in sales, in US automotive industries and how effective are these policies?
The automobile industry has powerful connections with other sectors of the economy, and, thus, the impacts of a shock in this industry can affect the entire economy to a large extent (CNBC Video, 2012). For instance, the leading three US automotive industries, including Ford, Chrysler and GM, provided highly skilled jobs to employees of different classes (http://video.cnbc.com/gallery/?video=3000059620). However, the US automobile industry was highly impacted by the Euro Crisis, due to lack of appropriate practices by Companies and guidelines from government of addressing both internal and external issues.
The US automotive industries experienced a decline in sales due to macro and micro factors, lack of appropriate government policies and poor management practices (Ian, 2010). Some macro factors that led to this problem include recession and related credit crunch. Micro factors mainly included the ability to postpone the purchase of automobiles with no significant concerns.
Besides, the decrease in sales during the Euro Crisis was exaggerated by the lack of appropriate government policies to secure the automotive industries from external shocks. Again, sales were affected during the crisis, since the US automotive industry lacked competent managers who could address dealer and brand issues, as well as, other concerns. These managers were short-sighted and could not make viable decisions to avoid much impact during the crisis (Ian, 2010).
United Nations (2009) reveals that the US government did not fully intervene even when the industry was experiencing reduced sales ahead of the crisis. While the government provided subsidies to two of the three leading automotive industries, this effort was not enough to arrest the situation.
According to Ian (2010), enhancement in financial market conditions would have promoted car sales, since the decrease in car sales commencing in 2008, was caused by the lack of access to credit, which made most homes suspend their car purchases.
a). Research Design
This study is supposed to address effects of the Euro crisis on US Automotive industry. The study will entail collecting data from managers of the three leading US automotive industries. Thus, the study is qualitative in nature, since it seeks for the views of managers regarding the impact of the Euro crisis on their industries, as well as, their own practices and government policies that seek to address this issue.
b). Population and Sampling Plan
The population for this study will be managers of three leading US automotive industries. Purposive sampling will be used to select the 18 respondents. This is necessary to ensure that the chosen sample can meet the research objectives.
The research instruments will be mainly questionnaires, which will be distributed to the sample.
d). Questionnaire Procedure
Participants will be presented with questionnaires. These questionnaires will be administered at different times, depending on the availability of respondents. The questionnaires will contain both open ended questions and closed ended questions.
e). Data Analysis and Interpretation
Data for analysis will be obtained from responses in the questionnaires. Data reduction, coding and conclusion drawing, will form vital elements of the analysis. Interpretations of results will be displayed using charts and graphs.
f). Ethical Issues
One of the issues of research ethics involved in this study is voluntary participation. No participants will be coerced to take part in research. Rather, participants will be required to sign the informed consent form after agreeing to take part in the survey. Participants will be informed of every detailed procedure and step that needs to be taken in order to complete the study.
There are various limitations to this research. First, the study will depend on the opinions of respondents. Some respondents may give incorrect information, thus, affecting the finding of the study. Another limitation of the method will be accessibility. Accessing staff from the three US automotive industries is difficult. Therefore, it might take more time to get them to provide the relevant information.
CNBC Video (2012). Euro crisis impact on autos. CNBC. Retrieved from http://video.cnbc.com/gallery/?video=3000059620
Ian, G. (2010). Automotive industry: trends and reflections. Geneva: International Labor Office.
United Nations (2009). The global economic and financial crisis: regional impacts, responses and solutions. New York: United Nations.