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Sunday, November 16, 2008

Fall of American auto-industry will cause more job losses.

The American auto industry is in a critical condition. Yesterday, I wrote about GM’s poor condition and possibility of filing for bankruptcy. The same thing is happening with Chrysler, and Ford. IF these three companies collapse, it will be a big blow to America’s economy. David Cole, Head, Center for Automotive Research, said that about three million jobs will be lost if the American automotive industry collapse. There are so many businesses that are linked to the three automobile manufacturers such as parts suppliers, car sales and repair etc. If these companies are shut down, they will also affect these businesses. Patrick Anderson, Chief Executive, Anderson Economic Group, said that failure of one car maker would result into a job loss between 60,000 and 80,000. Guardian says:

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.

On November 17, 2008, the US Senate will decide whether they should give a portion of the $700 billion to US auto makers. Many people in and outside the politics, think that it would be a bad idea to give money to the auto- industry. Mr. Anderson believes that even after government’s intervention, at least 35,000 jobs will be lost. He said that necessary restructuring of the industry would lead to between 30,000 and 40,000 job losses around the country.

Related article:

Guardian

 

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