Effects of the 2008-2010 automotive industry crisis on the United States

Beginning in the later half of 2008, a global-scale recession adversely affected the economy of the United States. A combination of several years of declining automobile sales and scarce availability of credit led to a more widespread crisis in the United States auto industry in the years of 2008 and 2009.

Following dramatic drops in automobile sales throughout 2008, two of the "Big Three" U.S. automakers – General Motors (GM), and Chrysler – requested emergency loans in order to address impending cash shortages. By April 2009, the situation had worsened such that both GM and Chrysler were faced with imminent bankruptcy and liquidation. With the intent to prevent massive job losses and destabilizing damage to the entire manufacturing sector, the U.S. and Canadian governments provided unprecedented financial bailout ($85 billion) support to allow the companies to restructure and jettison legacy debt via Chapter 11 bankruptcy. Both companies separately filed for this protection by June 1.

General Motors emerged from bankruptcy as a new company majority owned by the United States Treasury, and Chrysler emerged owned primarily by the United Auto Workers union and by Italian automaker Fiat S.p.A.. Both companies terminated agreements with hundreds of their dealerships and GM discontinued several of its brands as part of bankruptcy proceedings. Ford Motor Company was able to survive without entering bankruptcy partly due to a large line of credit which it obtained in 2007.

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