The Strategist

The US auto industry is waiting for a collapse: did Trump lose?

06/23/2017 - 08:21

Wall Street worries that the US automotive industry is heading towards a recession, reports Reuters on June 22. The hard times for thousands of workers at General Motors plants in the United States have already come.

As early as the beginning of the year, on January 20, when GM abolished the third shift at its plant in Lordstown, 1,200 workers lost their jobs, and the cuts will continue.

The boom in the US auto industry since 2010 has been the main driver for job creation. Withering of this boom, which is already observed by analysts, threatens the prospects for US industrial production and job creation, which was one of the main arguments in favor of Donald Trump in Ohio and other manufacturing states.

Last week, the Federal Reserve said that output in the US fell by 0.4% in May, which is due in part to a 2% decrease in the production of cars and parts. According to statistics, the auto industry in the United States accounted for less than 2% of 45,000 production jobs in the first quarter of this year. Mass layoffs can threaten the state economy. To date, General Motors provides 40% of tax revenue against 85% in the early 1990s.

Traditionally, problems with production are the result of the fall of the market.

Although the decline in car sales in the US is still insignificant compared to the collapse in the financial crisis of 2007-2009, when demand for new cars fell to the lowest levels in recent decades, there is still a drop. The American car market in May fell by 0.6% and amounted to 1 509 633 cars and SUVs. Negative dynamics has been fixed for the fifth month in a row. Following the results of five months of 2017, sales of cars in the US fell by 2% to 6 million 937 thousand 739 units.