The banks were wary of lending to the public and this went onto manifest itself in the form of a credit crisis. Lack of credit, a profusion of bad economic news led to the fall in consumer confidence. By March 2008, the US saw the worst job loss in the last five years (Isidore C., March 2008).Coinciding with this crisis, between June 2007 and June 2008 average crude oil price jumped 92% from $ 61 per barrel to $117 per barrel (Jackson J. K., November 2008). All these started taking its toll on the economic climate and car sales declined drastically in the US. In September 2008, for the first time in 15 years, monthly car sales fell below 1 million units (Strott E., October 2008).Moreover, experts in the field of automobile point out that the Japanese auto manufacturers like Honda, Toyota have been making better, often cheaper and greener cars than their US counterparts (McKenzie B.R., n.d.).Especially Toyota has been beating its US rivals in quality, productivity, cost reduction and other key parameters (Toyota as number one: continuous improvement key to success, 2006). This is shown in its sales performance for the year 2008, when for the very first time in history Toyota sold more automobiles than General Motors (Toyota Beats GM for First Time, January 2009).In this scenario, the ‘Big Three’ of US automobiles, General Motors (GM), Chrysler and Ford pleaded for a bailout package from the Federal Government. The CEO of the ‘United Auto Workers’ (UAW) also joined the company bosses (U.S. auto execs plead for Congress to fund the bailout, November 2008). These three companies requested for $34 billion at first, then $25 billion and finally requested for $15 billion. But the Government only provided them $13.4 billion and pushed on any farther help to 2009 February (Sint K., Lu A., January 2009).
Economic Crisis And Its Impact On The Trade In The U S