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To examine the causes the independent variables will be the costs associated with the production and sale of the cars, looking a both the direct and the overhead costs in the years prior to the bailouts, to assess the degree to which the firms appeared to have control over their costs. If there was a lack of control over the costs, the level of costs may be a predictor of future problems.
Definition of Terms
Before undertaking the research it is necessary to define some of the terms which will be used. The failure of a firm relates to whether a firm entered into bankruptcy. Bailout funding was the funding that was received from the government as part of an official bailout package in order to help the firm survive.
The costs will be assessed in terms of the overall costs incurred to manufacture cars; this may be the cost per car, or the cost in terms of the revenues, measured by the gross, operating and net profit margins.
Research Design
The research will start with an extensive literature review, examining the issues that have impacted the industry, with a particular focus on Chrysler, as a firm that has faced bankruptcy and received bail out funds. The position of the firm will be assessed using a case study approach, with the aim of identifying factors which may have indicated the forthcoming problems.
The research...
The statistical analysis will have the aim of identifying whether or not there were any common patterns that could be seen as indicators.
Output
The resulting research report will provide insight into the reasons behind the failures of the U.S. automotive industry and the need for the bailout, with specific reference to Chrysler.
References
Isidore, C. (2008, November 17). Auto Bailout: Showdown. CNNMoney.com. Retrieved from http://money.cnn.com/2008/11/17/news/companies/gm_showdown
Hiraide Norikatsu; Chakraborty, Kalyan, (2012) Surviving the Global Recession and the Demand for Auto Industry in the U.S. -- a Case for Ford Motor Company, International Journal of Economics and Finance, 4(5), 85-94
Ooghe, Hubert; De Prijcker Sofie, (2008), Failure Processes and Causes of Company Bankruptcy: a typology, Management Decisions, 46 (1-2), 223-242
Watson, Thomas, (2009), Automotive Trouble, Journal of Domestic Car Production, 82(7), 11-12.
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