FastLane is CAR
Here it is: the pdf that launches a $25b+ (and the rest) bailout. GM’s FastLane Blog gets out the big guns: a Center for Automotive Research (CAR, geddit?) report that says that millions Americans will be condemned to soup kitchens if the Big 2.8 go belly-up. As always, I invite TTAC’s Best and Brightest to analyze the data– and its reliability– on the community’s (not to mention taxpayers or humanity in general) behalf. It must be some serious shit, because the FastLane folk are downplaying it BIG STYLE (so sue me: I’m an oxymoron): “You see a lot of discussion in the news – and even in the comments of this and other blogs – about the state of the domestic auto industry and what the current economy means for the industry’s future. Some of you have even expressed the belief that this is something GM and the US industry brought on ourselves, and that the domestic industry should be allowed to fail. ‘So what if Detroit goes down,’ the thinking seems to go. ‘It doesn’t affect me.’ However, the reality may very well be that it does affect you.” May? Cowboy-up guys! Anyway, the study reckons that… hang on. Here’s CAR’s background on itself: “To fulfill its mission, CAR maintains strong relationships with industry, government agencies, universities, research institutes, labor organizations, and other major participants in the international automotive community, The Affiliates Program to strengthen those industry ties and build support of ongoing service activities.” Oh, and about CAR’s director David Cole, son of former GM Prez Ed Cole.
“He is also a director of the Original Equipment Suppliers Association, as well as a director of seven automotive supplier companies. In addition, Dr. Cole is a member of the Executive Committee of the Michigan Economic Development Corporation (MEDC) and was recently appointed by Michigan’s Governor to the Strategic Economic Investment and Commercialization Board and the Michigan Renewable Fuels Commission. He was named a co-chair of Detroit Renaissance’s ‘Road to Renaissance’ Project in the fall of 2006. At the University of Michigan he is a member of the Energy Research Council and Mechanical Engineering External Advisory Board. He is also a member of the Denso Foundation Board. Dr. Cole was formerly a director of the Automotive Hall of Fame and a member of the Board of Trustees of Hope College.”
So no conflict of interest there. Bottom line: if the D2.8 go belly-up, it’ll cost $554.5b to $368.8b in lost income, lost tax receipts and increase in “transfer payments.” Where’s my checkbook?
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Let's say Chrysler disappears (Chapter 7, not 11). This is the most likely scenerio, IMHO, assuming no government meddling (like creating American Leyland out of GM and Chrysler combined). Then, there will be a Chrysler-sized hole in the marketplace immediately which will need to be filled. The imports won't be able to fill it all, and even part of the hole they will fill will be filled by American production. The rest will be filled by Ford and GM. Now, there will be a fair number of jobs lost, but the increase in the number of imported vehicles will be minimal. Most jobs lost will not be in production, but in management, engineering, marketing, etc., of the old Chrysler (and salesman and mechanics and whatnot at their dealers). And, most of the jobs lost in production will mostly be due to technology, not imports. That is, an 80-year, inefficient Chrysler plant closes and a brand spanking new Toyota plant opens (in the US), which makes the same number of cars but with half the workers. There will be some increase in imported vehicles (and job losses there), but maybe only a third of the number of vehicles Chrysler made in total. That is, Chrysler going poof will save GM and Ford, at least in the short to medium term, since their sales will both increase significantly. GM and Ford need to throw a boat anchor to a drowning Chrysler, not the imports.
never mind...