In celebration of Automotive News' 100th Anniversary, Ford School professor Joshua Hausman authored a guest essay on the Great Depression's impact on the auto industry.
"The progress of the U.S. auto industry in its first 30 years was extraordinary," Hausman writes. During that timeframe, the number of cars increased by over 1,000 percent. This changed in the 1930s, though. "The Depression, of course, was difficult for all businesses in America. But the auto industry faced the added difficulty of trying to sell a durable good in hard times." People delayed buying new cars or resorted to other options for transportation. Hausman notes that "more cars were junked than were sold," and "so few cars were being sold in 1932 that in November three times more cars were stolen as were sold in Chicago."
Things turned around after President Roosevelt's election in 1933, "but the Depression left its mark on the industry. It benefited the Big 3 at the expense of other companies. Ford, General Motors and Chrysler accounted for 74 percent of motor vehicle sales in 1929; by 1935, they accounted for 87 percent of sales." Unions also transformed the face of the auto industry, with the workers who remained employed during the Depression seeing significant wage increases.
Hausman's essay concludes, "Thus, the ultimate legacy of the Great Depression was an oligopolistic industry sharing its monopoly profits with workers."
Professor Hausman's essay will appear as part of a collection in a commemorative hardcover book. Read the full text here.
