The Automobile Oligopoly

    The United States automobile market is an example of an oligopoly, and there are three sellers that dominate it. These sellers are: Ford, Chrysler, and General Motors. All three companies sell a variety of similar cars at similar price points. These three companies have built a reputation as the "Big Three" in the industry. This reputation has been earned through years of countless sales in the US and outside as well. Ford has been the second highest ranking automobile maker for the past 56 years. Additionally, before 2007, GM had the most sales for 77 consecutive years. However, this oligopoly which looks good on paper, in recent years may be economically hurting people more than suggested. 

    In the year 2008, Chrysler and GM were both on the verge of bankruptcy and therefore claimed that they needed a governmental bailout. While Ford was not dealing with bankruptcy, they did not want to be at a financial disadvantage, so they too got in on the bailout. The government paid them $80.7 billion dollars over the course of seven years. This bailout ended up costing tax payers $10.2 billion dollars. Unlike powerful monopolies, oligopolies, as we have learned in class, are not seen as a threat, because they are made up of multiple companies, as opposed to one big company. If a company such as Google were seen costing the tax payers, $10 billion dollars, this would not yield the same response. In summary, while not often, oligopolies such as the automobile industry, can ended up harming taxpayers, and taking money from everyone. However, oligopolies often get away with the power that they hold because they are a few small companies, as opposed to one big one.