- The automotive sector is the country’s largest manufacturing industry, and it accounts for approximately 20% of our manufacturing GDP. Automakers are actively restructuring and modernizing to become more competitive while at the same time meeting new standards imposed by Congress. But the fact is that this evolution takes time and money that the automakers just don't have right now.
Financial and market instability, an ongoing credit squeeze and closed capital markets have drained the liquidity from automakers’ operations. Auto sales have plummeted along with consumer demand and confidence, really cutting back on automakers’ revenue. A partial or total failure of a major auto manufacturer would have a massive economic ripple effect on the entire U.S. economy. And the serious economic troubles affect far more than just the major auto companies. It's the manufacturers, the suppliers, the dealers and all the way down the chain.
The auto industry in America cannot be sustained under these extraordinary economic conditions without additional support.
The Department of Energy (DOE) this week began processing applications for the direct auto loan program. The NAM has been working closely with the Administration to expedite this process and we view this move as a positive first step. That said, it's clear from the automakers' earnings reports that the situation is dire. Automakers need immediate funding to stay on track during this difficult time.
We're talking about close to a million jobs in America-we're talking about a lasting impact on our industrial production in the United States. We simply cannot afford to let the auto industry fail.