Going Global: The Harley Davidson Case

If a wealthy nation is a powerful nation, the loss of wealth can herald the loss of power. Globalization, a fundamentally constructive revolution, is the catalyst driving the current situation. On the international level, globalization creates jobs, promotes trade, and encourages cooperation between countries. The interconnected nature of national economies creates a net that not only helps sustain troubled economies, but actually discourages international hostilities by introducing an additional layer of reciprocity. Through globalizat... ... middle of paper ...

Just as the economic status effects industry, the industry itself has a tremendous effect on the economy. The economy and the industry offer many benefits to one another, it is difficult to decipher which is more influential. The Recession of 2007-2009 The recent recession in the United States had a significant consequence on certain American automotive companies. Companies like General Motors (GM) and Chrysler have been forced to file for bankruptcy due to losses in the recession. The economy’s downfall has proved to be fatal in terms of profits and employment all over businesses in the United States.

Mushkat, Miron, and Roda Mushkat. "The Political Economy of China's Regulatory State: A Reappraisal." BYU Journal of Public Law 27.1 (2012): 145-83. Academic Search Complete. Web.

Nevertheless, the spill-over effects of the failing US mortgage market sealed the fate of the company when the money markets that Northern Rock had depended on for years crashed at the start of August 2007. The sub-prime mortgage market crisis started in the United States in the fall of 2006 and took hold as a global financial crisis by July 2007. Due to innovations in securitization, the risks from these sub-prime mortgages had to be shared more broadly with investors which essentially led to the ripple effects in the world-wide economy. The mortgages are generally repackaged into a variety of complex investment securities which are bought by institutions to diversify their portfolios. In the case of the U... ... middle of paper ... ...ultimate fate of Northern Rock is still undecided although a consortium led by the Virgin Group is the bank’s preferred bidder.

Even today, strong debates continue over major issues caused by the Great Recession in part over the accommodative federal monetary and fiscal policy (Economic Policy Institute, 2013). The Great Recession of 2007 – 2009 enlarges the longest financial crisis since the Great Depression of 1929 – 1932 that damaged the economy. The causes of the Great Recession all started as hundreds of billions of dollars was given to the United States abroad and financiers conceiving were to make a profit and what better way but the real estate market. Since the Community Reinvestment Act of 1977 and an expansion made in 1995 the than President Bush endorsed the program that created Option adjustable rate mortgages (nick-named “Pick-A-Pay”) to allow for bank to sell these options even though they were high risk (Conservapedia, 2013). The Community Reinvestment Act of 1977/95 is defined as to framework financial institutions, state and local governments, and community organizations to jointly promote banking services in the community” (Office of the Comptroller of the Currency, n.d.).

Wale, Kevin, Bob Dvorak, Sri Kaza, and Nick Santhanam. (2012). "Automotive innovation in China: The view from General Motors." Mckinsey Quarterly no. 1: 85-92 5.

Journal of Asia Entrepreneurship and Sustainability, 3(2), 60-80. Retrieved from http://www.asiaentrepreneurshipjournal.com/AJESIII2Swapna.pdf Sweeney, M. (2010). Foreign direct investment in India and China: The creation of a balanced regime in a globalized economy. Cornell International Law Journal, 43, 207-248. Retrieved from http://www.lawschool.cornell.edu/research/ilj/upload/sweeney.pdf Wei, W. (2005).

11 (3), pp.46 Lin, Z. (2013). VAT replacing business tax: A major tax reform in china. International Tax Journal, 39(2), 17-22,43-44 Wolfers, L., & Ng, C. (2013). VAT reform in China: impact on construction and real estate.

its rapid and successful development, China has been exposed under the spotlight all the time. The world economic crisis happened in 2007 not only damaged the economy of America but also the international image. We have seen the vulnerability of American economy and the failing role of taking responsibility for the economic crisis. Simultaneously, as a huge economy, China is the only country recovers in the minimum duration. The recovery of China also contributes to the spring back of regional and global economy.

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