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Posts Tagged ‘U.S. economy’

Health Care Legislation Passed by House Will Force Job Losses

In Uncategorized on March 22, 2010 at 10:24 pm

The Senate-passed healthcare legislation will unquestionably burden Americans with countless mandates, new taxes, penalties and higher insurance premiums. Small businesses will be hindered by stringent regulations and taxes that will ultimately force them to slash jobs. This bill comes at a time when unemployment stands as the most important problem facing the country today.

The House on Sunday night voted 219-212 to send H.R. 3590, the Patient Protection and Affordable Care Act – the health care bill passed by the Senate on Christmas Eve – to President Obama for his signature. Later, the House voted 220-211 to approve H.R. 4872, the Health Care and Education Affordability Reconciliation Act of 2010, a package of amendments to the Senate bill. That measure now goes to the Senate, where it is expected to be considered this week.

The Senate bill imposes a penalty of $750 per full-time worker on companies with 50 or more employees that do not provide coverage to full-time workers. But the House reconciliation bill would increase that penalty to $2,000, with the first 30 workers exempted. If an employer offers coverage but the coverage is deemed unaffordable to a full-time employee, that employee can opt out to a new purchasing exchange. The company would then be assessed $3,000 for each of those employees up to a cap of $2,000 for every full-time worker on the payroll. This mandate becomes applicable in 2014.

The National Retail Federation expressed extreme disappointment at the House’s passage of sweeping health care reform legislation over the weekend, saying added labor costs under the bill will cost many retail workers their jobs.

“This is a historic moment, but not a cause for celebration. Congress has embarked on a dangerous, anti-job experiment in the midst of the worst economy our nation has seen in decades,” NRF Senior Vice President for Government Relations Steve Pfister said. “How many lost jobs will it take before Congress reverses course?”

“Our nation simply cannot afford more job losses during this economy, and many businesses already struggling to keep their doors open may not be able to withstand this added financial burden,” Pfister said. “Retailers have told Congress all along that we value our employees and want to expand upon the millions of workers and their families for whom we already provide coverage, but that to do that we need reform that would lower costs. Instead, we’ve been handed employer mandates that do just the opposite while doing little or nothing about the cost of medical care, which in turn drives higher coverage costs.”

“We are particularly concerned about mid-sized companies that are large enough for the mandates to apply but too small to have the ability to absorb these added costs,” Pfister said. “They could be among the hardest hit. And small businesses that drive so much of the job creation in our country are going to be forced to hold their size under 50 workers to avoid the employer mandate threshold.”

Under the bill, seniors will see their Medicare benefits significantly reduced, resulting in limited choices and higher costs. While Medicare will be cut, Medicaid will be expanded, despite the fact that the program is going broke and states are struggling to keep up with the expiring federal matching program. Imposing an unfunded mandate will only exacerbate Medicaid’s problems.

“If health care is not funded properly through Medicare then the end result will be greater rationing of our health care system and fewer, more costly options for Medicare recipients”, said Peter Shanley, CEO of The Small Business Council of America (SBCA), a national nonpartisan, nonprofit organization which represents the interests of privately-held and family-owned businesses on federal tax, health care and employee benefit matters.  “The quality and availability of health care will go down and Medicare patients will be hurt in the long run.”

The new health law also empowers federal officials to dictate how doctors treat privately insured patients (Senate bill, pp. 148-149).  Never before in history, except on narrow issues such as drug safety, has this been done. The bill will require nearly all Americans to be in a “qualified plan,” then says that plans can pay only doctors who implement whatever regulations the Secretary of Health and Human Services imposes to improve “quality.”  That covers everything in medicine — whether your cardiologist uses a stent or does bypass surgery, whether your ob/gyn settles for a pap smear or orders a pelvic sonogram.  It could also cover reproductive issues.

There are many problems with the nation’s current healthcare system that can be rectified through medical liability reform, pooling health insurance, offering tax incentives, allowing states to customize programs, and reforming insurance regulations. Forcing a government takeover of healthcare, especially through parliamentary gimmicks, will not solve America’s healthcare problems – it will only exacerbate them.

Majority of Americans Pessimistic About Economic Recovery

In Uncategorized on December 23, 2009 at 10:35 pm

As 2009 comes to a close and Obama’s popularity dwindles, the majority of Americans are filled with significant uncertainty and anxiety about the state of the US economy – and its prospects for a quick recovery in the New Year.

Of the 1,000 Americans surveyed by telephone over the weekend by polling firm StrategyOne, nearly 9 in 10 Americans (87%) believe the US is still in a recession and 3 in 4 (78%) disagree with economic experts that the US is no longer in a recession.

Despite increasingly optimisic talk from experts about the health of economy, just 1 in 4 (26%) believe the economy will recover fully by the end of 2010. Instead, the majority of Americans – 51% – believe the economy won’t fully recover and be back on track until sometime until the end of 2011 – or even 2012. A frighteningly high 15% believe the economy will never fully recover.

“Consumers appear more likely to believe the economy has stabilized compared to the summer, but see a pretty long road to full economic recovery,” said Bradley Honan, Senior Vice President of StrategyOne, who authored the survey. “15% of US consumers believing a full recovery won’t ever take place speaks to how deeply scarred America has been left by the recession – and how the hangover is likely to last well beyond the ‘official’ end of the recession.”

The StrategyOne survey also found that slightly more people believe that the economy is on the wrong track (48%) than on the right track (44%), and most Americans believe the economy has either “not yet bottomed out and will get worse” (34%) or that “it’s at the bottom and not getting better or worse” (19%).

That’s not to say that opinions are not shifting more positively though, indeed they are. For example, Americans are not nearly as negative about the state of the economy as they were in July.

Today 42% say the economy has “bottomed out and is getting better” compared with just 30% who felt that way in July of this year. The current StrategyOne survey found that the youngest consumers polled, those 18-34 years of age, were most likely (50%) to believe the economy has already “bottomed out and is getting better” compared with just 38% of those 55 years and older, who feel the same way. There is clearly a significant generational gap about perceptions of the economy today.

“It’s clear some of the positive discussion about the economic recovery has broken through – but there is still much, much more consumers need to hear to regain their confidence in the direction of our economy,” said Bradley Honan of StrategyOne.

Survey Methodology:

StrategyOne conducted 1,000 telephone interviews among a representative sampling of Americans between December 16 and 20, 2009. The overall margin of sampling error at the 95% level of confidence is = +/- 3.1% overall and larger for subgroups. Statistical weights were designed from the United States Census Bureau statistics.

Latest Senate Health Bill Continues to Overlook Plight of Small Businesses

In Uncategorized on December 22, 2009 at 12:15 am

The Small Business & Entrepreneurship Council recently announced that the latest version of the Senate health care bill continues to ignore the plight of U.S. small businesses, and instead burdens them with additional taxes and regulations that will drive business costs even higher.

“Rather than moving in a direction that heeds the concerns of small business, the Senate health bill imposes an even higher tax burden on our sector while retaining other tax, regulatory and compliance measures that will drive business and health coverage costs higher,” said SBE Council President & CEO Karen Kerrigan.

According to SBE Council, the “manager’s amendment” put forward by Senate Majority Leader Harry Reid raises the Medicare payroll tax higher (from 0.5 percent to 0.9 percent), and exposes small businesses in the construction industry to a punishing employer mandate that will cripple this already hurting sector. The bill singles out the construction industry by not exempting businesses in this sector from the “play-or-pay” employer mandate that other firms with 50 or fewer employees are exempt from (although it does exempt construction firms with five employees or less). The latest Reid bill also increases the individual mandate penalty/tax, which will hit the self-employed, and maintains an array of other tax hikes and regulatory requirements that will drive up the cost of health coverage for small business.

Kerrigan said changes to the tax credits aimed toward helping small business are too insignificant to outweigh the cumulative cost load of the overall bill.

“The changes that were added to mollify small business concerns are too minuscule and complex,” said Kerrigan.

SBE Council has urged the Senate to start the legislative process over, and include small business reforms within the core bill. The group has long advocated a national marketplace for health care, robust tax incentives for businesses and individuals, the expansion of health savings accounts, tax parity for the self-employed, medical liability reform as well as support for local and state programs that are helping to deliver health care and insurance to those who lack access. Such market reforms and tax incentives will do far more to cover the uninsured — and at far less cost to taxpayers — than the $2.5 trillion Reid bill, according to SBE Council.

Actuaries Detail Health Care Reform Concerns to Congressional Leaders

The American Academy of Actuaries has detailed concerns for congressional leaders to consider as they negotiate combining the House and Senate versions of health care reform legislation. The actuaries underscored the need to limit adverse selection, whether it is stemming from new issue and rating restrictions or inherent with the current design of a new federal long-term care insurance program better known as the CLASS Act.

“Adverse selection occurs when higher-risk individuals are more likely to purchase coverage while lower-risk individuals are more likely to forgo coverage,” said Cori Uccello, the senior health fellow for the American Academy of Actuaries. “The result is that premiums increase.”

The actuaries said that an effective and enforceable individual mandate will minimize adverse selection resulting from more restrictive issue and rating rules that are included in both versions of health care reform legislation.

“The individual mandate language should be strengthened,” Uccello said. “The viability of health care reform depends on attracting lower-risk individuals. Strengthening the mandate through higher financial penalties and non-financial incentives would increase the likelihood that these individuals will purchase coverage.”

Regarding the CLASS Act, the actuaries continued to express their concerns regarding adverse selection issues that are likely to lead to high premiums and could threaten the viability of the program. The actuaries recommended adding eligibility restrictions to the program to limit adverse selection.

The actuaries also addressed other significant areas of the bills including an excise tax on employer-sponsored coverage, grandfathering provisions and medical loss ratios.  The letter is available at: http://www.actuary.org/pdf/health/differences_jan10.pdf.

Related Links

IBISWorld industry reports:
Global Direct Life, Health and Medical Insurance Carriers
Life & Other Direct Insurance Carriers in the U.S.
Funding (Federal) – Medicare and Medicaid in the U.S.

November Jobs Report Stirs Optimism But Economy Still Weak

In Uncategorized on December 4, 2009 at 6:30 pm

Unemployment data released today by the U.S. Department of Labor indicates that although job losses have slowed significantly, the economy continues to face challenges.

According to the report the U.S. economy shed 11,000 jobs in November, the smallest decline since the recession began in December 2007. The unemployment rate edged down to 10.0 percent. Retail job losses slowed to 14,500, compared to the more than 44,000 jobs lost in October.

“Today’s unemployment report gives hope to consumers and retailers that a recovery may not be far off. However, it is also a reminder that employers seeking to grow their workforces continue to face challenges,” said RILA President Sandy Kennedy. “Policymakers intent on stimulating job growth and the economy must focus on reducing the challenges employers face rather than erecting new barriers to job creation – which elements of the health care legislation under consideration threaten to do.”

The average of 87,000 jobs lost per month in the overall economy over the past three months is down considerably from the 700,000 per month pace of job loss at the depth of the recession.

The retail industry shed 14,500 jobs last month, an improvement over the more than 44,000 retail jobs lost in October and considerably better than the 90,800 jobs lost in November 2008. The retail industry averaged 33,000 job losses over the past three months, compared to an average of 70,000 over the same period last year.

Other economic data likewise show that the economy has begun to recover. Initial claims for unemployment insurance have fallen back to the level of last September before the worst part of the financial crisis, while increases in personal income and spending in October suggest improved prospects for families. The housing market remains weak but has stabilized, with home prices up over the past two quarters, and rising home sales whittling down the elevated inventory of homes for sale. Forward-looking surveys of purchasing managers suggest that the manufacturing sector has begun to expand, while orders for services firms are improving as well. Overall, GDP grew by nearly 3 percent in the third quarter of this year, and many forecasters believe it is on track for a similar increase in the fourth quarter. In sum, the economy remains weak, but a broad view of the data suggests that spending and incomes are on the rebound and that the job market is slowly turning upward as well.

“Today’s data confirm that the labor market is beginning to heal,” said Donald B. Marron, visiting professor at the Georgetown Public Policy Institute and RILA outside economist. “Layoffs have slowed dramatically in recent months, but new hiring remains restrained. Employers are adding hours but not yet jobs, though employment has increased in a few sectors, including temporary help services and department stores. We have a long way to go to get back to the strong economic performance that Americans have come to expect, but the economy and the job market are turning up.”

Health Care Reform and Jobs

Costly burdens, such as those imposed by the health care reform legislation passed in the U.S. House of Representatives, and the legislation currently under consideration in the U.S. Senate, could undermine economic recovery and cost more jobs for the retail industry, while also pushing insured retail employees from the health care plans they currently have and like.

“Congress simply should not pursue major initiatives that could add significantly to the cost and regulatory burdens faced by the retail industry, thus providing a disincentive to the hiring and business investment critical to ongoing economic recovery efforts,” said RILA president Sandy Kennedy.

Of specific concern are provisions within the Senate bill that would shift costs on to employers to pay for a public plan, reduce benefit-design flexibility and innovation, or not take into account the unique needs of the retail workforce such as separate treatment of part-time and holiday hires.

Investors Driving Gold Price To All-Time Highs

In Uncategorized on November 10, 2009 at 11:37 pm

42-16219665Inflation concerns have been put on the backburner over the past year as the credit crisis intensified and inflation expectations declined – allowing global central bankers and political leaders to aggressively address more pressing deflationary impulses. In response to the combination of last week’s Fed announcement that its zero-interest rate policy would continue “for an extended period of time,” and the weekend’s G20 meeting in which policy makers renewed their commitment to stimulus initiatives, investors drove the gold price to all-time highs. There is a growing contingent of inflation hawks that view the colossal efforts to avoid global deflation through massive increases in the money supply by the world’s central bankers as destined to lay the foundation for a period of widespread and intractable inflation.

In spite of a strong recovery in asset prices, a contraction of credit spreads and a marked drop in volatility, the Bank of England disclosed on Friday that it was increasing the money supply by an additional 25 billion GBP ($41.9 billion USD) after the UK economy posted an additional 0.4% decline for the third quarter. Like the Fed, the Bank of England cited continuing spare production capacity as one of the factors that prompted the action.

The aggressive expansionary policies of central bankers has caused investors’ risk appetites to increase as the perception that governments will be there to step in at the first sign of any turbulence becomes entrenched. The inflation in asset prices is partly a result of investors being pushed out on the risk curve due to the fact that rates of return on capital in traditional savings accounts has been driven to zero. Although holders of risk assets have responded to these moves by driving all assets classes higher, the increase in the gold price portends an inflationary outcome as a result of the easy money policies being undertaken.

Although inflation is more popularly defined as an increase in the price levels of goods and services, it is technically a decline in the value of money caused by an increase in the money supply.  An increase in the price of goods and services that is caused by a fundamental shift in supply and demand factors – say, an increase in oil prices due to the increase in aggregate demand caused by economic development in emerging economies – is not an example of inflation. However, an increase in the money supply caused by central bank policy – such as the Fed’s direct purchase of Treasury bonds or open-market purchases of mortgage-backed securities – fits the classical definition of monetary inflation. Price increases usually attend inflation because as the supply of paper money increases – without a commensurate increase in production – the excess demand manifested by a greater money supply causes the price of goods and services to rise. More currency chasing fewer goods will eventually lead to price inflation.

Although the adjusted monetary base in the United States has been growing at an increasing rate since the dollar was taken off the gold standard, it has grown by more in the last 14 months than it has in the previous 80 years to $1.96 trillion. In percentage terms, growth since August of 2008 is a staggering 125%. The next-highest period of monetary growth took place during the depression and World War II – but year-over-year growth never exceeded 28%.

Inflation doves insist that deflation still remains the primary threat to the global financial system and discount any notion of inflation, saying that there has been no credible sign or threat of an increase in prices in any of the data released over the past year despite the massive injections of liquidity undertaken by the world’s central banks. The flaw in this conclusion is that while inflation has not yet been manifested in price levels, the seeds have already been sown, awaiting germination in the form of nascent economic recovery. When recovery begins, the liquidity that now sits dormant as reserves in the banking system will flow as banks begin to redeploy reserves and increase lending. In the aggregate, this lending activity will increase monetary velocity, the factor currently missing in the inflation equation. Central banks must precisely gauge this activity, and divine the correct moment and apply the exact pressure required on the stimulus brake or inflation will sprout like weeds after a drenching rain.

Even without hard evidence of inflation, policy makers must tread cautiously. It is inflation expectations – as much as inflation itself – that central bankers must carefully manage. The threat of inflation is almost as powerful as the phenomenon itself. Business decisions become more difficult to make without stable money, hence investment often declines. Inflation distorts the economy. It causes capital to be misallocated and it destroys purchasing power. Inflation and inflationary expectations can lead to hoarding out of concern that purchases must be made now because prices will be higher in the future. It is this terrain of threatened inflation that gold investors have been eying as they push the gold price to new record highs.

According to industry research firm IBISWorld,  over the five years to 2008, the price of gold has increased at an annualized rate of 19.1%. The predominant reason for the high level of growth is attributed to higher demand for gold as investors attempted to hedge themselves against inflation or a possible depreciation in the US dollar. Also contributing to the upward pressure on prices over the last five years was the increase in gold jewelry consumption, particularly as disposable incomes rise in many parts of Asia.

Related Links

World Price – Metals – Gold in the US – Business Environment Report

Majority of Companies Believe U.S. Economy Will Rebound in Early 2010

In Uncategorized on August 25, 2009 at 6:24 pm

New research from Deloitte issued today shows that although most major companies surveyed believe that the U.S. economy will start improving in early 2010, many of those same companies will lag behind the general economy when the rebound occurs. The reason: Too much focus on short-term, tactical actions and little attention to structural changes and strategic investments that are needed to support growth in the new business environment.

Approximately 55 percent of companies surveyed feel the U.S. economy will start showing signs of recovery in the first or second quarter of 2010; though 25 percent think relief won’t come until the third quarter or beyond.

Industry research firm  IBISWorld forecasts the US economy will decline by 3% in 2009, and will not return to its normal course until 2011. Believing unemployment will continue to rise into the first quarter of 2010, Dr. Richard Buczynski, chief economist at IBISWorld, believes it won’t be until 2011 that overall economic activity will again surpass 2008 levels.

After implementing initial cost cutting measures when the economy first began to tumble — such as reducing salaries, layoffs and plant shutdowns — many companies are now are confused about their next steps,” said Kelly Marchese, principal, Deloitte Consulting LLP. “We believe these businesses should stop focusing on short-term concerns and look at their business in this new reality. Businesses need to focus on areas such as talent, growth and structural change so that their business doesn’t just survive — it thrives.”

Deloitte also identifies the following three key economic phases and their timeframes that businesses need to recognize, and provides recommendations for corporate leaders to consider as they focus their business revitalization efforts during these uncertain times:
Phase 1: Over the Edge: companies were focused on shuttering their business, generating cash, and looking at tactical cost reduction. Survival was priority number one.
Phase 2: Lumpy and Bumpy: the current phase of the economic downturn where companies need to place the focus on structural changes, strategic investments and a resetting the profit model.
Phase 3: Growing into a New Reality: this is what companies need to prepare for; where the new economics, market realities and competitors emerge.

“Like any recession, this one will play out in stages and will vary by industry,” said David Brainer, principal, Deloitte Consulting LLP. “And, regardless of which stage your company fits, or the speed of change, you must move beyond tactical, reactionary moves and make structural changes needed to support growth. To make this shift, companies need to be proactive and prepare now for the new growth environment, whatever it may look like.”
As Deloitte sees it, every organization grows at its own pace, determined by factors as large as the global economy and as personal as its current balance sheet. But, every business must grow — the only question is how. Getting it right requires deep industry and business insights that help identify smart, well-timed investments. But, that’s just the beginning. Profitable growth also involves effectively assimilating and integrating those investments, something far too many companies fail to accomplish. It’s not just about strategy; it’s also about practical execution.

For more information and a copy of the Deloitte survey visit: www.deloitte.com/us/heretodaywheretomorrow

For IBISWorld’s economic forecast “Economic Crisis: When Will It End?” visit: http://www.ibisworld.com/recession2009/default.aspx

Small-Business Bankruptcy Filings Up 81% In June

In Uncategorized on August 11, 2009 at 7:41 pm

Commercial bankruptcies among the nation’s more than 25 million small businesses increased by nearly 81% in June 2009 from June 2008, according to Equifax Inc., which analyzed its comprehensive small business database for the study.

There were 10,339 bankruptcy filings in June 2009 throughout the U.S., up from 5,712 a year ago, according to the data.

California is the most negatively affected state with 10 MSA’s (metropolitan statistical areas) among the 15 areas with the most commercial bankruptcy filings during June. Los Angeles, Riverside/San Bernardino and Sacramento metropolitan areas led the nation in small-business bankruptcy filings. The other MSA’s with the most bankruptcy filings during the month include:

Charlotte-Gastonia-Concord, NC-SC
Atlanta-Sandy Springs-Marietta, GA
Portland-Vancouver-Beaverton, OR-WA
Dallas-Plano-Irving, TX
New York-White Plains-Wayne, NY-NJ
California (excluding MSA’s within the state)
Oakland-Fremont-Hayward, CA
Santa Ana-Anaheim-Irvine, CA
Denver-Aurora, CO
San Diego-Carlsbad CA
Oregon (excluding MSA’s within the state)
Houston-Sugar Land-Baytown, TX

“The data shows that the economic pain is continuing for small businesses across the country,” said Dr. Reza Barazesh head of North American research for Equifax’s Commercial Information Solutions division. “While it may not be quite as intense in some areas as what we saw earlier this year, we’re still seeing hefty increases in the number of bankruptcies in a lot of major metro areas. ”

The Atlanta MSA increased to 208 bankruptcies from 93 a year ago; Houston increased to 153 from 84; and Charlotte, which wasn’t even in the top 15 a year ago, had 225 bankruptcies in June, the fourth highest of any MSA.

The company’s report also listed the 15 metro areas with the fewest small-business bankruptcy filings. They are:

Springfield, MA
Lafayette, LA
Cedar Rapids, IA

Charleston, WV
Hagerstown-Martinsburg, MD-WV
Hawaii
Huntington-Ashland, WV-KY-OH
Clarksville, TN-KY
Gainesville, FL
Gulfport-Biloxi, MS
Huntsville, AL
Lynchburg, VA
Baton Rouge, LA
Beaumont – Port Arthur, TX
Brownsville-Harlingen, TX

For the analysis, Equifax analyzed both Chapter 7 and Chapter 13 filings. Chapter 7 is a liquidation proceeding in which a debtor receives a discharge of all debts, while Chapter 13 is a reorganization bankruptcy enabling filers to pay off debt over a set period of years.

According to IBISWorld, an industry research firm, the key difference in bankruptcy law – as a result of the Bankruptcy Abuse Prevention and Consumer Protection Act – is that the qualification requirements for a Chapter 7 filing, under which non-exempt assets are liquidated to pay some debts and many remaining debts are canceled, have become more stringent.

This means that those unable to qualify under the new rules are left with the less palatable choice of a Chapter 13 filing, under which debts must be repaid over a period of up to five years under court supervision. Any debts not addressed by the court plan under Chapter 13 are generally forgiven, though the filer’s access to credit is restricted for a period of up to ten years.

IBISWorld notes that in 2005, the year before the new legislation took effect, 71.4% of business bankruptcy filings fell under Chapter 7, compared to 60.3% in 2006.

Headquartered in Atlanta, Georgia, Equifax Inc. operates in the U.S. and 14 other countries throughout North America, Latin America and Europe. Equifax is a member of Standard & Poor’s (S&P) 500(R) Index.

Headquartered in Los Angeles, California, IBISWorld  is recognized as the nation’s most trusted independent source of industry and market research. The firm provides  a comprehensive database of unique information and analysis on over 700 U.S. industries – offering the largest collection of industry reports available.

‘Cash for clunkers’ proposal hurting the U.S. Auto Industry

In Uncategorized on June 3, 2009 at 11:56 pm

Hyundai Motor America has released survey data showing that as of May 29 at least 38 percent of potential new car buyers in the U.S. are aware of a pending fleet modernization ‘cash for clunkers’ program, and 11 percent of car buyers are delaying their purchases until this legislation is passed or defeated.

This represents as many as 100,000 lost industry sales each month due to uncertainty around this program.

“With sales in the U.S. auto industry forecast at the lowest levels in 26 years, it’s imperative that we move forward with this stimulus bill,” said Hyundai Motor America President John Krafcik.

“The auto industry makes up 10 percent of the consumer portion of the country’s gross domestic product. Any stimulus to the auto industry will make a major improvement in the overall U.S. economy, which remains severely depressed,” said Krafcik.

“The longer this bill, which is so important to the U.S. economy, remains stuck in Congress, the greater the pressures placed on all aspects of the U.S. automotive industry – from suppliers to manufacturers to dealers. We urge Congress to move quickly so that American consumers can benefit from this program during the peak summer selling season,” said Krafcik.

Nearly half of all vehicles sold by Hyundai Motor America are manufactured in the United States at Hyundai Motor Manufacturing in Montgomery, AL. In total, Hyundai directly employs more than 5,000 people in the U.S., with facilities in 14 states across the country. Including its almost 790 dealers and suppliers, Hyundai has created more than 35,000 jobs in the United States.

The ‘cash for clunkers’ program aims to stimulate demand for American cars by providing federal vouchers–up to $4,500–for people who trade their old, inefficient car for something ‘greener’ with better mileage. The cars must be American-made, however foreign brand cars may qualify if they’ve been manufacturerd on U.S. soil.

According to industry research firm IBISWorld, revenue in the New Car Dealers industry will have decreased by an annualized real rate of 6.6%, falling from $758.3 billion in 2004 to the expected $540.1 billion by 2009.