Economics of the auto industry

Economics of the auto industry
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Even though, chapter 11 Bankruptcy came into being in the 19th century when railroad companies had a bigger proportional the manufacturing industry, it is still relevant today. Similarly, the auto industry in the US used the Bankruptcy reorganization after the global down turn of 2008 -2009. General Motors (GM) announced in 2009 that it was going to close many outlets and file for Chapter 11 Bankruptcy reorganization to avoid going into bankruptcy courts (Krebs, 2012). Chrysler also experienced problems after there were substantial car sales in the auto industry which led to massive job losses resulting to the same measures as GM. Consequently, the Obama Administration resulted to bailing out the large firms of the industry to avoid further damage to the economy (Krebs, 2012).
Before there was a bail out from the government, there was downsizing in the industry after consumer spending fell affecting the car manufacturing industry. The Ford company had large cash reserves and did not need to be bailed out, but the company also engaged in massive lay offs and down sizing the work force to minimize the losses from premises which were not in full operations. Thus, in addition to reorganization the industry engaged in downsizing in view of the changing demand in the sale of cars, from large SUVs and trucks...