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If there is a recession, auto production cuts likelier than incentives

If the United States slips into a recession next year, it could unfold very differently in Detroit than it did in 2001, according to Detroit Free Press business writers Tim Higgins and Jewel Gopwani.
That time, automakers offered generous incentives to buyers in the wake of 9/11, rather than let demand fall and plants go idle. GM kicked off the no-interest loan craze with its Keep America Rolling campaign.

Incentives won't go away, but this time it appears that automakers are more likely to accept fewer sales at higher prices. Automakers are already choosing to cut production to meet reduced demand.

To be clear: No Detroit automaker is talking recession publicly, but on Monday, GM and Ford both announced lower production plans for the first quarter of 2008 -- the lowest since at least the recession of 1991.

Posted by Peter C. T. Elsworth  at 11:01 AM to commentary | Permalink

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