While the rest of the U.S. economy is still creaking forward, the recession monitor is flashing yellow in Detroit. The reckoning was postponed for months by the Big Three's inveterate optimism, which kept assembly plants cranking out cars as though nothing were wrong, and by Detroit's ever sweetening sales incentives. But by the end of the year's second quarter, evidence of a reversal was clearly at hand: during the first six months of 1989, total car sales in the U.S. fell 7.2% from last year's first half, to 5.1 million.
Inventories of unsold cars have swollen to 1.8 million vehicles. At...
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