Four years later, car industry rebounds from brink
(CBS News) President Obama is making the health of the car industry a big issue, claiming credit for saving General Motors. On Tuesday, GM reported its sales rose 10 percent in August compared to a year ago. Additionally, Ford's sales were up 13 percent while Chrysler's rose by 14 percent. So why is Detroit in high gear?
Five million Americans either build or sell cars and trucks. On Tuesday, workers showing up for the midday shift at GM's plant in Arlington, Texas were smiling.
"It's wonderful," said one man. "I hope they keep going up. Everybody here needs to keep working."
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Sales growth in August exceeded the predictions of industry analysts and led usually cautious company executives like Kurt McNeil of GM to crow about their progress.
"When you think about all the jobs we provide to the U.S. and the supply base," he said, "it is incredibly important and will continue to become more and more important to this great country."
A small bump in the construction industry fueled pick-up sales, and easier financing helped move SUVs and sedans.
Industry analyst Joe Wiesenfelder of Cars.com, said car makers have recovered from the recession. "There is no doubt the U.S. industry is in better shape," he said. "Actually the entire industry's in better shape than it was four years ago. It's really returning more to the way things were before 2008."
The U.S. industry is now on pace to sell 14.5 million vehicles this year -- 4 million more than their 30-year sales low in 2009.
But to get to this point, Chrysler and GM had to go through bankruptcy, had to close more than 30,000 dealerships, and shed workers. About 1.2 million people were in auto manufacturing a decade ago. Today, there are 790,000.
Now while the U.S. market seems to be growing, economic problems in Europe are proving to be a huge drag on the American car makers. GM alone lost more than $200 million in Europe during the first half of this year.
