In Crisis, Wheels Coming Off for Detroit Automakers

Economic downturn bad news for cars
By Kevin Spak,  Newser Staff
Posted Oct 10, 2008 9:19 AM CDT
The Lincoln Town Car assembly line is shown at the Ford Wixom Assembly Plant in Wixom, Mich., Wednesday, May 16, 2007.    (AP Photo/Carlos Osorio)
camera-icon View 2 more images

(Newser) – The situation in Detroit looked bleak before the current economic crisis; now, it looks apocalyptic, the Washington Post reports. As GM’s stock fell 31% yesterday. Adjust for inflation, and the company is worth far less now than it was after the 1929 crash. “It’s devastating,” said Michigan Gov. Jennifer Granholm. “Companies that are already slammed by globalization are being slammed by the credit crunch.”

Automakers are among the first hurt by any economic downturn, since people cut big purchases first. Ford and Chrysler have each seen sales drop more than 30% over the past year. That could mean even more pain for workers, and Michigan has already lost almost 400,000 manufacturing jobs since 2000. “We're in uncharted waters,” said one GM analyst. “Right now there's so much uncertainty, plans are being revised constantly.”