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Recession-hit automakers brace for grim US sales

(Agencies)
Updated: 2008-12-02 14:07

WASHINGTON -- Walloped by the recession, automakers' US sales are plummeting as hard-to-get credit, job losses and other stresses make many Americans wary of taking on big-ticket financial commitments.

Federal Reserve Chairman Ben Bernanke speaks during a luncheon of the Austin Chamber of Commerce Monday, Dec. 1, 2008, in Austin, Texas. He said that further interest-rate cuts are 'certainly feasible,' but he warned there are limits to how much such action would revive an economy likely to stay weak well into next year. [Agencies]

Auto sales for November, released Tuesday, are expected to show a drop of 36 percent from a year ago to a seasonally adjusted annualized rate of 10.2 million vehicles, according to Joseph Amaturo, analyst at Buckingham Research. Those sales figures would include the Big Three Detroit car makers as well as foreign companies that sell vehicles in this country.

Related readings:  Goodbye, jets: Ford CEO will make trip to D.C. in a car  Bush: 'I'm sorry' the economic crisis is occurring  Panel says US has been in recession since Dec. '07

Later Tuesday, General Motors Corp., Ford Motor Co. and Chrysler LLC will provide a skeptical Congress with details about their long-term viability plans. The US auto companies are desperately trying to secure $25 billion in fresh government loans to help them survive the economic carnage. They insist that bankruptcy isn't an option, even as companies burn through cash and bleed jobs.

The auto industry's plight comes under an intense spotlight just one day after the United States got some grim news of its own: The economy has been stuck in a recession since December 2007.

Most Americans sorely knew it already, but it became official on Monday with the determination from the National Bureau of Economic Research.

With the decision by the NBER, a group of academics, the United States has fallen into two recessions during President George W. Bush's eight years in office. The first one started in March 2001 and ended in November of that year.

The economy jolted into reverse in the final three months of last year. After a short spring rebound, it contracted again in the summer. Economists say it is still shrinking and will continue to do so through at least the first quarter of next year.

Unlike some past recessions, consumers are bearing the brunt of this one. Clobbered by vanishing jobs, the credit crunch and hits to their wealth from sinking home values and plunging portfolio investments, consumers have cut back sharply on their spending, which accounts for two-thirds of all economic activity.

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