Word: cars
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Dates: during 1970-1979
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Floor Traffic. Thus the sudden skid in car sales hit the already shaky economy with the impact of a runaway truck, toppling it into a much deeper recession than almost anyone had anticipated. Government economists estimate that the car slump accounted for fully half of the 9.1% decline in gross national product in the fourth quarter of 1974 and was the major factor in lifting the nation's jobless rate to more than 7%. Moreover, chances for even a moderate business recovery in the year ahead depend to an enormous degree on a resurgence of car sales...
Against this grim background, the auto industry is fighting back. So far, the results of the rebates have been encouraging. Before they went into effect in mid-January, auto sales were 15% below the miserable levels of a year ago, when the energy crisis clobbered car sales. The rebates were largely responsible for the boost in sales from a dismal 93,235 cars in the first ten days of January to 133,000 cars during the second ten days of the month. Dealers claim that volume has climbed substantially since then. Tom Shanley, an American Motors executive responsible for sales...
...risk Detroit is taking is that the public's car-buying fever will cool rapidly after March 1, when all the rebates will have ended. Moreover, says David Eisenberg, auto analyst at the Wall Street brokerage house of Sanford C. Bernstein & Co.: "If the programs are tremendously successful, it could well mean that Detroit is borrowing sales from future months." Eisenberg believes that if post-rebate results are disappointing, the automakers will probably have to cut prices permanently, even if that means they will have to swallow losses...
...Controls. The difficulties the automakers are having with Government safety and pollution regulations are a prime consequence of that flaw. For years the auto companies did not take seriously enough the rising clamor for greater car safety and less polluting engines. As a result, Government moved in and imposed stiffer standards than might have been necessary if the companies had acted voluntarily...
Detroit has been fighting a losing battle for a decade against the safety and pollution regulations. According to estimates by GM, Ford and Chrysler, the cost of meeting these standards has already added between $499 and $600 to the price of a car. (The Bureau of Labor Statistics, however, puts the cost at $415.) Company representatives are pressing Congress for a five-year delay in the stiff Government pollution-control standards now scheduled to take effect in 1977. The automakers contend that, instead of being forced to spend money on devices that reduce emissions, they should be allowed to develop...