Consider this when you're against the 25B loan of the 700B allotted.
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How many jobs are at stake?
GM (GM, Fortune 500) has about 120,000 U.S. employees. Ford (F, Fortune 500) has about 80,000 and closely-held Chrysler LLC has about 66,000.
In addition, the three automakers have about 14,000 U.S. dealerships that between them employ another 740,000 workers.
The suppliers used by the Big Three also employ an estimated 610,000 people.
Add that up and you have more than
1.6 million jobs tied to the auto industry.
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You think that many people being unemployed wouldn't hurt? I'm curious why no one has told the UAW that instead of 2010 for changes, it now has to be 2009??
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The automakers are asking for about $25 billion in loans to help them survive until 2010. Advocates for a bailout argue that if the Big Three can hang on until then, they'll be in position to be competitive long-term.
That's because billions of dollars in annual savings won in the 2007 labor agreement with the United Auto Workers union kick in that year, including shifting the responsibility for retirees' health care costs to union-controlled trust funds.
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How about this idea GM, sell off some of your damn branches!! Ford is unloading Mazda and ownership in Suzuki...what is GM doing?
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What happens if there's no bailout?
GM risks running out of money later this year or early in 2009 without a bailout.
GM burned through $6.9 billion during the third quarter, leaving it with only $16 billion on hand as of Sept. 30. But it needs $11 billion to $14 billion to continue normal operations.
Ford and Chrysler have more cash relative to their needs, mostly from money they borrowed prior to the current credit crunch.
But each of those automakers could also run out of cash during 2009 without federal assistance.
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And for all the Chapter 11 fans.....not so much
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What are the arguments against a Chapter 11 bankruptcy?
Given the current credit crunch, many experts question whether automakers would be able to get necessary financing from lenders to help them during the reorganization process.
There are also doubts whether consumers would buy new vehicles from a bankrupt automaker due to concerns over their resale value and warranty. In effect, an automaker that files for Chapter 11 could eventually wind up going out of business anyway.
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And the kicker.................
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What are some of the other broader economic impacts if an automaker goes out of business?
Nearly 2 million Americans get their health insurance directly from one of the Big Three automakers. Most of them would lose that coverage if their company goes out of business.
A failure of one of the Big Three could also cause a string of bankruptcies among suppliers. And beyond the job losses at the automakers, dealerships and suppliers, media companies that generate a lot of revenue from auto advertising as well as retailers in towns where plants are located could also have to cut many jobs.
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