![]() ![]() Europe’s industrial giant, Germany, was teetering on the edge of recession before the coronavirus crisis hit. Many were battered by the impact of Trump’s trade wars and tariffs on supply chains and a slump in business investment. ![]() The shutdowns this time, however, are also coming after a bad 2019 for manufacturers around the globe. But the auto sector around the world, Dziczek says, is in far better shape than it was in 2008 - when the global financial crisis led to government bailouts and a grinding crisis that saw mass layoffs and the permanent closure of many plants. The damage to the auto sector this time will depend on how long the shutdowns last. alone is equivalent to losing 94,400 jobs, $7.3 billion in personal income and $2 billion in tax revenue. “There is no longer doubt that the longest global expansion on record will end this quarter,” they wrote.ĭziczek says a week of lost auto sales in the U.S. economists titled a note to clients about the global slowdown “The day the earth stood still.” “If you waved a hand and got rid of the virus tomorrow we’d be back to normal in a week,” Guinnane said. Plus, he said, it’s not clear - yet - that there will be longer-lasting damage to the U.S. follows an encouraging example in China where life has started to return to normal after a six-week closure. Guinnane argues the shutdown now under way in Europe and the U.S. Timothy Guinnane, an economic historian at Yale University, argues the better parallel may be with what came after the end of the war in 1945, specifically with post-war Germany, “where the whole country came to a halt for a few months.” The Federal Reserve Bank of Philadelphia’s survey of factories showed conditions in the area worsened in March by the most on record. unemployment benefits rose by 70,000 to 281,000 in the week ended March 14, according to Labor Department figures. ![]() “Every automaker? Every region in the world? I don’t think that has ever happened.”ĭata released Thursday gave a glimpse of the deterioration that’s coming. World War II might be the best analogy,” said Kristin Dziczek, head of research at the Center for Automotive Research in Ann Arbor, Michigan. “I don’t know that there is an analog in recent history. announced this week follow hits the industry has taken in other big producing nations like China, Japan and South Korea. Such a move to retool and shift production dramatically would echo the industrial transformation seen in the 1940s as factories moved from producing consumer goods like cars to turning out tanks and guns for the war effort on both sides of the Atlantic.īut since then, experts couldn’t recall a similar synchronized shutdown in such a huge portion of the global auto industry. and other automakers to start producing ventilators vital to treating people affected by the virus. Larry Kudlow, his top economic adviser, later told Fox News that the administration was already in discussions with General Motors Co. It also may justify President Donald Trump’s declaration March 18 that he has become a “wartime president” leading the fight against an “invisible enemy” in the virus.Īmong Trump’s moves was his authorization of powers under the Defense Production Act, which was established at the time of the Korean War to allow the government to direct industrial capacity. and Europe are idling plants in response to the crisis, echoing the industrial shutdown in China that reverberated through global supply chains earlier this year and adding to the case that a global recession may already be under way. The economic impact of the growing coronavirus outbreak is shifting from service-driven industries like hotels and restaurants to the manufacturing sector on both sides of the Atlantic, leading to a synchronized shutdown of heavy industry that historians and industry experts say is unlike any seen since the 1940s.Īutomakers in the U.S.
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