The recession forced both General Motors (GM) and Chrysler into bankruptcy protection. Ford (F) suffered through with reductions in work force, plant closures and discontinued product lines. After the initial euphoria of not being dead yet wore off, automakers have faced turbulent times for the past two years. Survival of the past has been proven, but will the future bring the same?
American automakers long held a very high perch in American manufacturing. The economic meltdown of 2008 and the following years have presented glaring realities to investors that these companies are not impervious to economic slowdown and failure. Despite the domestic economy, the automakers have survived and moved toward profitability. The economic crises in Europe has added another layer of worry for this industry as demand has slowed and the resulting production overcapacity is forcing the industry to make some very hard decisions about plant closures and labor cuts. In North America, workers that made concessions during the recession are looking for some quid pro quo now that the companies are profitable. The Canadian auto industry has lost a third of its assembly line jobs and has had five plant closures in the last ten years as costs rose along with the stronger Canadian dollar.
A strike deadline of midnight, Monday the 17th was averted with the Canadian Auto Workers Union (CAW) when it was able to make a deal with Ford by the deadline. GM subsequently reached a deal with the CAW, Chrysler is still a holdout. To continue reading, click here.