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The U.S. economy under pressure as the car sales drop

23 May 2017
1802 comments
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The U.S. economy under pressure as the car sales drop

Since the US auto sales were steadily rising, they have helped the country to recover economically, but now as the car sales drop and the economy is also under pressure. US carmakers have started to idle workers for months at a time.

Trump has touted the auto sector - which he previously lambasted for moving production to Mexico - as proof of his programme's success. "We're going to have expansion," he told reporters last week.

 

 

Following seven years of steady growth that led to sales records in 2015 and 2016, deliveries of new vehicles in the US dropped 4.7 per cent in April in one of the steepest declines since the 2008-09 recession. Analysts have cut their forecast for US sales, which are expected to fall for the first time since the financial crisis.

Earlier this year, in response to prodding and threats from Trump over their overseas operations, Ford, GM and Fiat Chrysler announced plans to add jobs at their US facilities.

Ford even cancelled construction of a plant in Mexico, although it did so largely due to falling demand for passenger cars.

 

 

General Motors announced plans to add jobs in Michigan even as it moving ahead with cuts to production. But so far this year, GM has idled 3,000 workers at three plants in Michigan and another in Tennessee. Ford scrapped 130 workers at the Ohio Assembly Plant in Avon, Ohio, and now plans to cut another 1,400 salaried jobs.

And Fiat Chrysler Automobiles laid off hundreds of workers in Sterling Heights, Michigan, Toledo, Ohio and Belvidere, Illinois. Some FCA workers have been called back in Belvidere, but the company has not set a timetable for recalling the 6,000 workers idled in Sterling Heights and Toledo.

 

 

The American car industry, has experienced the biggest drops so far this year. Ford's sale are down 5.1 per cent, GM's have dropped 1.1. And Toyota, Honda and Nissan, all of which have large US production, also reported drops in sales in April.

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