MIAMI — The head of the nation's largest car retailer said Thursday that the auto industry's problems began in the same place as everyone else's: the housing market.
AutoNation Chairman Mike Jackson appeared with General Motors President Fritz Henderson in a forum at Nova Southeastern University in Davie. Almost 500 students and business people attended.
After 2005, the housing industry tried to propel itself by lending money to people who couldn't repay it, Jackson said. That's when his dealers started to notice people coming into the showroom fresh from a new-home purchase expecting to get the same easy credit they received with their mortgage. Some left disappointed.
"They would look at us like we were aliens," Jackson said, adding that their response to credit questions went something like this: "'I don't know why I have to tell you where I work or whether I pay my bills on time.'"
By 2008, the credit markets had collapsed and car sales went down with them.
Jackson said industry sales fell nearly 40 percent from previous norms, and things would've been even worse -- both for the industry and the U.S. economy -- had the government not stepped in to save GM and Chrysler.
Jackson said he's a "free-market Republican" and it pained him to say this, but: "Only the government had the power to save the day."
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