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Crash of US carmakers risks three million jobs
Posted By admin On November 17, 2008 @ 1:08 pm In Economic Crisis | Comments Disabled
November 17, 2008
Three million jobs could be lost in a year if America’s so called ‘Big Three’ carmakers – General Motors, Ford and Chrysler – are allowed to collapse, an expert predicts.
David Cole, head of the Centre for Automotive Research (CAR), an influential Detroit think-tank, said that so many US businesses depended on the Big Three for survival that allowing even one of the carmakers to fail would lead to tens of thousands of jobs losses nationwide.
‘The immediate shock to the economy would be felt well beyond the Detroit companies, negatively impacting the US operations of international manufacturers and suppliers as well. Nearly three million jobs would be lost in the first year if there was a 100 per cent reduction in Big Three US operations,’ Cole said.
His grim prediction came as US politicians continue to debate whether the government should extend financial relief to the carmakers by allowing them access to a portion of the $700bn (£382bn) bail out offered to the nation’s banks.
A bill to rescue GM, Chrysler and Ford with $25bn in emergency loans will be taken up in the Senate tomorrow, but its passage is far from guaranteed as many Republican senators object to government intervention in industry. Even if it is passed, many experts fear that tens of thousands of job losses can not be avoided.
Patrick Anderson, chief executive of the Anderson Economic Group, a US consultancy, believes that at least 35,000 jobs will be lost if the government intervenes to save the industry. ‘The necessary restructuring to take capacity out of the market would lead to between 30,000 and 40,000 job losses nationwide,’ he said.
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