Cynical Synapse

Sat, 23 May 2009

Obama: Automaker Woes Impact Entire Country

Filed under: Bailout, Business, Cars, Congress, Detroit, Economy, Michigan, Politics, Rants — cynicalsynapse @ 6:00 pm

President Obama still treats the auto industry unequally compared to the financial industry. Both are vital, he says, yet banks and Wall Street get shored up. We can’t let either fail. If it’s unacceptable for GM or Chrysler to just liquidate, why is it ok to give them a bailout so pitifully small there’s no doubt both will be driven into bankruptcy? I guess uncontrolled liquidation would be like murder. The pocket change given to Chrysler and GM was designed to give them time to get their affairs in order before pulling the plug on their life support.

Back in December, I pointed out automaker problems would have far reaching effects”. Apparently, no one got that until Chrysler chopped 798 dealers, impacting 40,000 dealership employees in every state of the union. Suddenly, some politicians are upset, including Rep. Bill Foster (D-IL), Vern Buchanan (R-FL), and at least 66 other Congressmen are agitated about the dealer closings. Duh! Did y’all think this was just a Detroit thing?

Chrysler is cutting 789 dealerships which will affect about 40,000 employees. That equals about 50 employees per dealership. Assuming the same ratio for GM, the net affect on jobs touches over 96,000 people. In Michigan, the 39 Chrysler dealers to be shuttered equates to about 1,980 workers. Michigan should expect another 2,675 jobs to be affected by GM dealership reductions. So, on top of the Big 3 job losses, Michigan is losing at least 4,700 dealership jobs. What’s hard to track is the ancillary jobs, like the barber, party store, donut shop, and neighborhood restaurant.

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