The U.S. Auto Industry and the Ripple Effect – Bail Out?

There are many views and debates on the current financial crisis that faces America regarding the Big 3, Chrysler, GM, and Ford. Should they be allowed to fail, or should American Taxpayers bail them out? If we let them fail it will result in many Americans losing jobs, healthcare, and mortgages at the fault of bad management philosophy that has occurred for many years. Some analysts predict this could bring on the next great depression.

One thing I want to personally say to the executives. Please stop flying in your private jets. You are a simple human being just like us and it won’t hurt you to sit next to a “common” person on an airplane. You want to save money? Stop throwing it away so wastefully!

From GM’s website www.gmfactsandfiction.com

From plants to parks. From dealerships to driveways. From gas stations to grocery stores. What happens in the automotive industry affects each and every one of us. In fact, the collapse of the U.S.-based auto industry wouldn’t just impact the nearly 355,000 Americans directly employed by the Big Three. One out of every 10 people in America is employed in a service that is related to the U.S. auto industry. If a plant closes, so does its suppliers, the local stores, the hot dog vendors, and the local restaurants.

The effect would be devastating in ways of which you never have thought:

• Nearly 3 million jobs would be lost in the first year alone – with another 2.5 million to follow over the next two years
• Personal income in the United States would drop by more than $150.7 billion in the first year
• The cost to local, state, and federal governments could reach $156.4 billion over three years in lost taxes, and unemployment and health care assistance
• Domestic automobile production would more than likely fall to zero – even by international producers, due to supplier bankruptcies

The credit crisis that is affecting us all is wounding the U.S. auto industry in many different ways. Carmakers can’t get loans to restructure and to produce new advanced technology vehicles. Suppliers and dealers can’t get loans for routine business, and customers can’t get loans for new cars.

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