The Great Recession was a transformative event for the US auto industry. The disastrous decline in auto sales and production, the ensuing federal bailout of General Motors and Chrysler, and the slow improvement in sales that was a consequence of the sub-par economic recovery all contributed to the fundamental reshaping of the industry. For municipal bond analysts, this metamorphosis was embodied in the bankruptcy filing of the City of Detroit on July 18, 2013.
Given the new shape of the US auto industry, pertinent questions arise for analysts:
- Is the auto industry still as relevant as a barometer of economic activity?
- Is auto-related activity still a powerful driver of state and local economic activity?
- How much does the industry contribute to state and local tax revenues?
In order to understand how the post-recession dynamics of the industry have altered the answers to these questions, “Can Auto Manufacturing Still Power Local and Regional Economic Performance?" provides an analysis of the current trends in the auto industry, the industry’s current impact on regional economic growth, and state and local government finances.