Probable Impacts of the Government Shutdown on U.S. Auto Industry


Though Beau Boeckmann’s Ford showroom and many other like that in California and other parts of Europe are making a booming business, but it is still absolutely unclear how the recently announced government shutdown is going to effect and influence the business. As per Boeckmann, the shutdown might not make a huge difference to the industry as long as it doesn’t linger on for long and starts affecting U.S. citizens on a personal level. The prolonged impact that this standoff might on showroom traffic has truly sent a shiver down the spine of an industry that has experienced best monthly sales this September since the year 2007.

According to Jenny Lin, a senior economist at Ford Motor, any such disruption in governmental and administrative operations affects government spending, financial condition of the country and also consumer confidence in an adverse way. Kurt McNeil, General Manager Ford Motors Co. USA also agrees with her and considers that in case the shutdown is dragged out for more than a couple of weeks, it will start to impact customer sentiment and naturally a bigger impact will be there on the business.

As per Diane Swonk the chief economist in Mesirow Financial holds the opinion that as the consumers have now become a lot more skittish due to a struggling economy this shutoff is certainly something that can be a worry for the automobile manufacturing industry of the country. As these headlines have already started playing out, it is only going to be a lot more difficult to woo the consumers for he holds the view that a volatile economy naturally makes consumers worried about investing in items like automobiles. Though Ford sales rose by around 5.7% and Fiat by 0.7% most other auto manufacturers have fallen behind target and sales of light weight vehicles in the country has also experienced the same fate.

Swonk also came of the view that resolving the dispute and bringing the shutdown to an end as sooner as possible is truly important as well as critical for the Congress as well as the White House for the USA automobile manufacturing industry that has been the only brighter spot in an economy that has remained cloudy for most part of the last decade. There are hopes that the shutdown is not going to give a paralyzing blow to the industry and things again fall in place before they actually get beyond a recovery.