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If Detroit goes down, so do 3 million jobs

Posted Nov 06 2008, 07:01 AM by Douglas McIntyre
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Every industry has its blue-chip think tank. In the case of cars it is the Center for Automotive Research, which has come out with a new and disturbing study.

Based on forecasts which look at The Big Three, the foreign competition making cars in the U.S., auto parts companies, and other related industries, a collapse of the U.S. auto industry would cost three million jobs. U.S. personal income would drop almost $400 billion over three years.

If only half of Detroit's capacity was compromised, the number of jobs lost would still be over two million when the ripple effects to other parts of the economy are taken into account.

In the worst case, the government would lose over $150 billion in 2009, 2010 and 2011. If those numbers are right, it leaves Congress and the administration one question: how much are they willing to spend to keep all that tax income.

Top Stocks blogger Douglas A. McIntyre is an editor at 24/7 Wall St.

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Comments

 

At this moment I am happy to be over 45 years of age — because the time has come when I can say — “We told you so.” Those young people out there under the age of 30 years have no clue as to what has already occurred. — Yes, my generation, and those who came before; screwed it up for you. There were small groups of us who tried to change things — yet, the large corporations and their greed took a strong hold on this country; and then our government started backing the corporations instead of the people; of course, the majority of people were subdued through television commercials. Thankfully, according to the stock market and our recent presidential election — the “Working Class” has awakened. The lost of 3 millions jobs, as sad as that is — it is no one’s fault except the American auto manufacturers. — They were warned; they saw this day coming back in the late 70’s early 80’s when Americans had to stand in long lines to purchase gas — back when we were only allowed to purchase gas on “Odd or Even” days, according to our license plate number. The American auto manufacturers needed to get inside their “Think Tanks” back then and come up with a vehicle that could run on alternative energy. — They made the choice not too. The technology for alternative energy sources has been around for a very long time; yet no one took it seriously. Where would America be today had our auto manufacturers made the choice to be the first to use alternative energy? — Well, we would be in a pretty awesome position right now. Instead, America decided to use technology as a means to earn quick cash through the sales of PCs, Laptops, I Pods, Blackberries, Kindles… and of course, plastic surgery. — Brilliant, it’s a little hard to afford these items when you don’t have a job. So the question is; what is America going to do now — continue on with their toys and games — or get serious and straighten out their priorities? Those of you with teenagers on your Christmas list may want to give serious consideration to NOT purchasing a new electronic gadget for them and instead, maybe a year’s subscription to Mother Earth Magazine.

Caroza, I agree with some of your thoughts, even though you're obviously an "Earthian".  Though I thought people like you would be overjoyed and full of positivity and hope since your canadate won!  (unless you voted for Nader or McKinney)  Anyway, what's the big deal.  So, we're losing another industry.  All we need to do is wait a little more than 2 months, then our savior will erase all our debts and pay us not to work.  Plus there are other high paying industries right here in America (for those who still want to work)  for our workers to migrate to.  All those people losing their jobs should move to LA and become movie stars, or rock stars, or TV stars or news anchors. These are the best jobs in the country.  And there are all the perks too!  Not only fame and fortune, but the rightous assumption that your liberal beliefs are correct and deserve to be pushed onto your adoring public.  And those who disagree with you truly are less than deserving human beings (and should rightly be taxed!)   P.S.  Promise making Obama better bring home the troops (every single one) on Jan 21st or I'll be pissst.

The thing Detroit did wrong wasn't pursueing high-margin vehicles (i.e. SUVs, etc).  Their main stupidity and inferiority vis a vis Japanes producers, is that the Detroit production lines can't be switched to different vehicles once tastes change.  The whole factory has to close down once the vehicle produced there becomes unpopular.  Japanese factories have flexible production lines that can produce multiple vehicles depending on need.  Guess who wins when tastes suddenly change.

There was really no excuse for Detroit being so stupid, since we've been down this road of radical changes in consumer tastes before.  They deserve to go out of business.  But unfortunately the stability of our country probably requires that we support those losers and hope they can get their act together.

BUY AMERICAN!!!!!!!    No brainer.

Things will only get worse under an Obama presidency.  This time, it won't be fun having to say "I told you so" in a few years.  Yikes!

Indeed, in the 70's Detroit had the opportunity to look ahead & develop vehicles using alternate fuel but we kept the Middle East wealthy buying their oil...and now we buy Asian vehicles rather than American...no brainer....The automotive Think Tank better get their act together soon...

Goodness gracious! Most of you, I agree with. Some, well, not so much.

The problems with the automotive industry start and finish with their inability to do anything quickly. Gas costs go up? Ooops! No small cars on the line to inject into the dealerships. -Need to design a new car? 4, 5, 6 years.

And let's not get into the loss of moneys because of leasing and financing. They are a reflection of the mortgage lending philosophy of the time.

For the record, I would like to say that it is easy to blame companies for being 'big business' or somehow evil, when our current tax and other laws, and investor mentalities,  -are largely to blame because they cripple a businesses ability to reinvest in their businesses and in R&D.

As for us making PC's,, etc... We design them, but we don't build them here. -We haven't for 10 years or more.

We have become a 'service' economy.

CNG looks very good as an automotive fuel, but our wonderful government seems to be in no hurry to provide us with the only relief that exists in the near term. -The home refiling stations are not obtainable in most states.

I live in Metro Detoit and cannot believe that some of these posts could be so cold-hearted.  We are talking about Millions of families that have worked steadily in the auto industry to find their jobs being cut.  Now, I watch my family members lose jobs, and friends who have worked on the lines for years, making a good living and not being able to find any kind of job in MI!  Nonetheless, a manufacturing job!  It is the leaders of these corporations that should be brought under fire for their lack of vision, but if we can bailout the banks....there should be some help for Motown's Auto Industry.

Yes, sad to hear the huge impact losing the auto industry would have.  I don't think it has much to do with politics and more to do with poor management.  The rising fuel cost was easy to see coming and Detroit just wanted to sell us all SUV's forever.  I've tried to buy a high quality US made small car (30 + mpg) for years but that isn't what they offer.  The rest of the world was dealing with expensive fuel so the other automakers obviously focused on it and got it right long before Detroit woke up.

I was hoping the last wasted $'s I spent fixing a US made car was over but I bet I'll get to bail them out soon with another government givaway.

Did anyone think about the unions. In a US auto factory if its not your job you can't perform the task. Even if it is simple as changing a light bulb. Call the electrician. This is a world economy and if we don't understand that then we are in big trouble. Our education of our children is second rate at best. Also we are all guilty of driving cars to large driving over the speed limit. Lets dig in and man/women up. Stop whining and do something, anything.  

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