Thesis and Presentation by: Brett Frank
Discussants: David Walsh
Daniel Wendt
 What
was the true cause of the United States
automobile crisis?
 How does the auto industry plan to
strengthen its long term competitiveness?
 10
sources
 Heterodox theoretical approach
 Historical narrative beginning at the
inception of the “Big 3” to present time
 What are the industry’s plans for regaining a
larger market share
 The
dominance of the “Big 3” peaked in 1955
with a market share of 94.5%
 Market share now hovers around 50%
 The woes of the auto industry are second
only to the financial industry.
 Chrysler and GM deemed too big to fail
 Legacy costs
Source: Klier, Thomas. "From tail fins to hybrids: How
Detroit lost its dominance." 33 (2009),
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=14065
50 (accessed March 13, 2013).
The United States automobile industry crisis
was not solely due to the financial
meltdown, it was also due to unsuccessful
strategic choices to maximize profits in an
increasingly competitive global market.
 Demand
shift and uncertain energy policy
 Legacy costs
 Subpar quality and lackluster cars
 Global slowdown
Source: Klier, Thomas. "From tail fins to hybrids: How
Detroit lost its dominance." 33 (2009),
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=14065
50 (accessed March 13, 2013).
Source: Klier, Thomas. "From tail fins to hybrids: How
Detroit lost its dominance." 33 (2009),
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=14065
50 (accessed March 13, 2013).
 Path
breaking contracts with the UAW
 Better product portfolio
 Improvements in quality, reliability, and
productivity
 “Big
Three” is now the “Detroit Three”
 Car makers should remain “disciplined” and
not get ahead of themselves in terms of
production.
 Another concern is a rise recently in risky
borrowers getting approval for car loans.

Blinder, Alan and Mark Zandi. "How the Great Recession." 1 (2010), http://facstaff.buffalostate.edu/kasperv/cgi-bin/pwd.pl
(accessed March 4, 2013).

Brunel, Claire and Gary Clyde Hufbauer. "Money for the Auto Industry:." (2009),
4.pdf (accessed March 13, 2013).

Gramlich, Jacob. "Gas Prices and Endogenous Product Selection in the U.S." 1 (2008),
http://128.36.236.74/seminars/apmicro/am08/gramlich-081216.pdf (accessed March 13, 2013).

Haugh, David, Annabelle Mourougane and Olivier Chatal. "The Automobile Industry in And Beyond The Crisis." OECD Economics
Department 745 (2010), http://cid.bcrp.gob.pe/biblio/Papers/OCDE/86280.pdf (accessed March 13, 2013).

Helper, Susan, John Paul MacDuffie, Joel Cutcher-Gershenfeld, Teresa Ghilarducci and Thomas Kochan. "Best Options for the Auto
Industry Crisis." 1 (2008), http://faculty.weatherhead.case.edu/helper/papers/Best Options for the Auto Industry Crisis 11 20
08.pdf (accessed March 13, 2013).

Klier, Thomas. "From tail fins to hybrids: How Detroit lost its dominance." 33 (2009),
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1406550 (accessed March 13, 2013).

McAlinden, Sean, Kristin Dziczek and Debra Maranger Menk. "CAR Research Memorandum: The Impact on the U.S. Economy of a
Major Contraction of the Detroit Three Automakers." Center For Automotive Research (2008),
http://cargrou1.www69.a2hosting.com/assets/files/detroit_three_contraction_impact.pdf (accessed March 13, 2013).

Platzer, Michaela and Glennon Harrison. "The U.S. Automotive Industry: National and State Trends in Manufacturing Employment."
Cornell University ILR School (2009),
http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1671&context=key_workplace (accessed March 13, 2013).

Rosenfeld, Herman. "The North American Auto Industry in Crisis." Relay A Socialist Project Review 26 (2009),
http://socialistproject.ca/relay/relay26.pdf

Rutenberg, Jim, & Bill, Vlasic. "Chrysler Files to Seek Bankruptcy Protection." NY Times, April 30, 2009,
http://www.netadvisor.org/wp-content/uploads/2012/03/2009-04-30-Chrysler-Files-to-Seek-Bankruptcy-Protection-NYT.pdf
(accessed March 13, 2013).
http://ww.iie.com/publications/pb/pb09-