White Paper

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The collapse of Detroit’s auto industry, specifically Chrysler LCC, General Motors Corporation and Ford Motor Company, caused a tremendous ripple effect throughout the region and it stretched all the way to Washington D.C.  The auto industry is one that is too large to fail in many ways. The history of the industry reflects how important it has become to our nation and why it cannot crumble beneath us.


The auto industry grew vibrantly in the early 1900’s. Detroit became a focal point for the industry and up until the 2000’s seemed like it couldn’t break beneath the changes that the industry threw at it. The changes in auto industry due to changes in the foreign penetration of the US markets were critical. The Detroit Three lost market share as the consumers demand changed towards a smaller car that GM, Chrysler and Ford were not prepared to offer.


The fluctuation in oil prices was another critical factor in the changes in this industry. Rising prices due to oil embargoes and the increasing demand hit the Detroit Three hard.


The first solution is to ensure the dispersion of large industry across physical landscapes. The concentration of the auto industry in the Detroit area was a scary factor in the potential demise of the Big Three. Secondly the government needs to ensure that the compensation for workers in industries this large is fair and reasonable. The people who make these decisions need to be industry knowledge.


Finally, there needs to be a backup plan. If the government is not able to prevent another crisis due to structural issues then there needs to be money set aside to help such large industries. The American people need to understand where their money is going and why.

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