Much of consumer sentiment regarding Detroit has been influenced by the 2009 collapse of the U.S auto industry and the corresponding bailouts that rescued General Motors(NYSE: GM) and Fiat Chrysler(NYSE: FCAU). This unforgettable history has left a sour taste in most Detroit citizen's mouths and has been impossible to ignore in recent memory. The auto industry however, has made huge strides towards fixing their image on the backs of record sales and profits the past few years, and the outlook for Detroit is positive on the back of the resurgence of the industry.
In 2015, a record number of new vehicles were manufactured and sold in the US. This year, new car and truck sales in the United States through June were up 1.5 percent compared with the first six months of 2015, posting more than 8.6 million in sales, including a 2.5 percent increase of the 1.5 million units sold in June, according to Autodata Corp. Industry experts forecast automakers will sell between 17.5 million and 18.1 million vehicles this year, outpacing last year's production of 17.47 million vehicles, which broke the previous record of 17.41 million set in 2000. Fiat Chrysler's Jeep, Dodge and Ram Truck brands each posted year-over-year sales gains in June, driving the automaker to its best sales mark in 11 years. Furthermore, through the first six months of the year, Ford's sales are up 5 percent, marking its best first-half performance since 2006. Ford's truck and van sales are up 13 percent through the first six months of the year compared with the first half of 2015, while SUV sales were up 9 percent, for their best first half ever.
The recent success of the Detroit auto industry has further contributed to justifying the controversial decision of the Obama administration's $80 billion rescue of GM and Chrysler back in 2009 and has been a strong motivator in the resurgence of Detroit after the 2008 financial crisis aggressively changed the economic landscape of the city. The record number of new vehicles sold in the United States come from companies that have been prolific in creating new jobs and paying existing workers more, all while posting the highest profits in their companies history. Meanwhile, of the $80 billion invested by Washington in the auto sector, almost the entirety of it has been returned to taxpayers after resuscitating an industry seen as a cornerstone of American enterprise in addition to saving and adding more than a million jobs.
Since 2009, key auto states have posted encouraging unemployment rates, coming a long way from the double digit figures posted at the height of the recession. The jobless rate in Michigan is currently 4.6 percent, below the national average, down from 14.9 percent in June 2009. In Indiana - the No. 3 state for auto manufacturing - the unemployment rate is 4.5 percent, down from 10.9 percent in early 2010.
In a political climate where many are turning a critical eye towards appraising the most significant actions of the past administration, the decision to rescue the auto industry and subsequently Detroit looks to have passed the test. Instead, of allowing giant automakers such as GM and Ford to stop production and lay off workers, the infusion of government assistance helped guide these hugely influential firms through bankruptcies that installed new management and fundamentally restructured unsustainable liabilities and cost structures. The future looks good for Detroit, and it is in large part thanks to the revival of the iconic auto industry.