Economic Impact of Declining Sales
Concern That Slump Might Wreck Economy
So far 1974 has not been a happy year for the American automobile industry. Sales have plummeted, production has been cut drastically, thousands of workers have been laid off, dealers have been plagued with huge inventories of cars they cannot sell, and declining profits have forced two of the Big Three auto manufacturers—Ford and Chrysler—to announce cutbacks in capital spending. General Motors, the largest and hardest hit of the companies, feels pressured to increase its spending on production of smaller cars.
Detroit's woes send shivers through the economy and invite comparison with the 1958 recession, which was preceded by an auto slump. That the industry has such an impact on the nation's economy is hardly surprising. ...