by George Ferrell

Created on: May 16, 2009   Last Updated: May 22, 2009

While the U.S. automakers are on the ropes with record losses and weak sales, the impact on newspapers could be substantial by creating yet another problem for newspapers in addition to weakening demand for newsprint editions in many markets across the country.

Newspapers traditionally have earned money by the sale of ads and newspaper subscriptions, and by selling papers daily. With the Internet, web editions have become more and more popular. This comes at a time when an economic downtown has hurt ad sales, of which auto and truck advertising in full page color ads seeking to help new and used vehicle sales.

For over a decade, the Internet has been developed as a method to transmit news and to report news, and recently, with the combination of a weakening economy, some from very weak auto sales, have caused double edged problem from both the economy and the web readership.

Auto sales have been most often cited as the key factor to evaluate for a recession as historically two bad back to back quarters in Detroit were thought to define a recession. More recently, another factor, retail sales has been used to evaluate the direction of the U.S. economy.

Usually, newspapers make more money when they print more newsprint, which in turn generally meant an increase in advertising. In recent years other factors, such as printing costs, circulation, advertising and sales figure in along with the general economy.

Many journalists like newsprint editions, but over the past decade increased readership has occurred on the web somewhat diverting readership from newsprint over to the Internet news. That can mean readers reading from a variety of sources, and that readership isn't always as easy to gain ad revenues from.

So, at the same time the U.S. auto industry has been downsizing, the effect has reduced some of the advertising. Most of the time auto sales are supplied in part through advertising, so many sales people realize that vehicle saies are largely contributed to by advertising that is done most in local, state and regional papers.

One large newspaper can have many full-page ads in the Sunday edition, full-color and very expensive, but pulling many potential buyers to the sales lots. When customers arrive to look at cars, trucks and Sports Utility Vehicles (SUV) , and sales stack up, profits can be made rapidly, and over the years, when automakers have products that Americans want, they can prosper and make profits for employees and shareholders.

In turn, when automakers make money, it ripples through the economy and helps people and businesses all throughout the American economy. When it works, the results are great. When losses occur, the extremes area awful.

The difference to the U.S. economy that a one percent drop or increase in sales can be extreme. Over the years when the auto industry is good, so is American industry.

With years of high oil prices, and economic uncertainties, seeing the auto industry improve, could help lead the way out of economic problems.

Autos may be party to over 20 percent of the U.S. economy, so the industry should not be underestimated. If sales pick up that might show the way to some daylight for the American economy.

Some auto dealers traditionally have tried to advertise more to pick up sales during a slump in the economy. Advertising brings customers and potential sales with newspapers being the biggest venue.

Chrysler, GM, and Ford, along with Toyota and the foreign manufacturers, could revive the economy if sales boomed this summer or fall.

Don't count on it, but for the economy to recover, some of the burden rests on the auto industry and their drive to boost sales to American consumers.

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