Casey Berry
Economy strains under weight of unsold items
By: Annys Shin
8:45 am Friday 6th
There are hundreds of cars and trucks that are not selling and they’re starting to back up the assembly lines. This is a sign that the economy will only get worse. Japan has gone down to 12.7% annual pace just in the past three months. According to Shin, businesses everywhere are in a jam to make supply in line with demand. Car companies say that downsizing is s difficult decision because they don’t know how much worse the economy will get. If they downsize too much then when and if the economy picks back up, they will be out of luck big time. They say that there’s a lot to cut, for example “over-capacity in everything from retail to manufacturing to housing”. According to Richard Yamarone who is chief economist at a research company said that the reason so many people are losing their jobs is because capacity is too large and you don’t need as many employees. The auto industry is one of the few that has been severely struck with excess capacity. In just 2008 they put out 18.3 million cars a year. Research shows that this coming year they will only put out around 11 million. This is just yet another example of our economy slowly but surely collapsing. The auto industry is really in a tough situation because they’re hesitant to downsize because the economy could pick back up. At the same time if they don’t they could go bankrupt. They are one of the many companies that are in a bind during these tough economic times.
3 comments:
That's a lot of cars not getting made. But how many do we really need? It seems like (and I don't know much at all about business, so this could be way off-base) the auto industry (and many other industries similarly) made cars in the economic boom at a rate that was just too high. How many cars do people really need? How new do they have to be? It seems like to me that if the world's business model had more to do with adequacy than with surfeit, we'd be in a lot better shape now.
I agree with Jesse. I don't think that people really need more than two cars and they do not need the newest cars. Granted we all need a way to get around but the fact of having a new car is not a need it is a want. Everything is so over priced and we need to stop spending our money on things we want and spend it on what we really need. A lot of cars are being made, but what for? We already have so many that have yet to be bought.
I agree with Jesse. I don't think that people really need more than two cars and they do not need the newest cars. Granted we all need a way to get around but the fact of having a new car is not a need it is a want. Everything is so over priced and we need to stop spending our money on things we want and spend it on what we really need. A lot of cars are being made, but what for? We already have so many that have yet to be bought.
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