Answered>Order 26579

Hello, I am looking for someone to write an essay on US Automobile: On Brink. It needs to be at least 1000 words.

Download file to see previous pages…

The United States government is committed to offering economic incentives to its people. the intent of such incentives is in the form of taxation policies, subsidies and credit policies. The government at all levels i.e. state and municipal governments have struggled to induce job creation.The United States reign supreme in technological and financial avenue, however for the sake of profit-making all such units were outsourced, bringing more revenue to the country but lesser to its people. This specific case has been true for automotive industry, GM and Chrysler were once considered to be the global automotive brand, but soon these industries realised that their global share was on the verge of decline due to the increased prices therefore the production of these industries was solely confined within the boundaries of North American countries, the profitability of these industries was function of the purchasing power of the people in the region.James (2003) suggested that in order to avert the collapse of the automotive industry, the government is left with limited options i.e. either to provide financing to these industries, improve the purchasing power of the people, restrict imports of European and Japanese automotive brands, impose taxes on the people for revenue generation of these industries etc. The economists are of the opinion that, “economic incentives such as tax credit and exemptions, cash grants, gap financing, and in-kind services could only be justified if companies receiving the incentives provided new jobs and earnings in exchange”. This validates the fact that economy works in chain, in exchange of all the listed incentives the government shall plan to offer to these industries, the recipients shall in return offer more jobs and opportunities to the local population for earning i.e. exchange of rewards.

Steve (2004) argues that “global competition facing U.S. companies accelerated as lower-cost foreign labour became more accessible”, this is specific reference to low-cost and qualified labour of China and India. Unfortunately, it is not only America which is suffered due to this factor, rather European-based automotive giants have suffered huge losses, and therefore were prompt enough to settle in India and China, to ensure gain and profitability with reasonable efforts.

Domestic Supplies and International Race: Misaligned Patches

With reference to domestic companies settled in States, these units had two primary options to ensure their participation in the competitive market i.e. “to remain competitive: shift operations to lower-labour cost regions offshore or invest in technologies that reduced the need for more expensive labour in this country”. Tom (2001) suggested that these options required necessary approval from the government, if the units intend to settle off-shore, the local job market will get affected and employment opportunities will shrink, the government has definitely no approved plan to manage such vast number of unemployed, especially when thousands of qualified and meritorious employees have been sacked due to the ongoing economic turmoil. The investment in technological avenue is wise though, but it requires lot of investment with reasonable risk factor. Steve (2004) reported that “both alternatives brought widespread reductions in jobs and earning within states and municipalities, and these jurisdictions found themselves competing for fewer incremental job opportunities”.

The government on its behalf has undertaken serious measure in states and communities which have been affected by the job-cuts and closure of industrial facilities. The government has plans to introduce structure economics incentives, intend of such scheme is to retain automotive operations and their associated jobs and payroll.