This article is about 10 days old now, but I heard NPR commentary today

[whistle]

...that is any one or more of the three major U.S. automakers goes under and closes that some 2.0 million jobs from the U.S. and affiliated supplier countries in Asia could be lost and not reabsorbed back into the economies for at least 2 years and possibly much longer. Now that would be a depression trigger! So very soon all three U.S. automakers will be asking for taxpayer bailouts far greater than the current $700 billion the that Paulson/Bush have shoveled over to their crony hedge fund and derivatives speculators and gamblers.

<On edit> I forget to mention Mexico and Canada job losses as well. Here is a more current article from the WSJ:

<snip>
October 20, 2008, 3:03 pm
What If the U.S. Auto Makers Don’t Survive?
Posted by Heidi N. Moore
The Big Three could soon become the Big Two. Is even that too many?

The question of whether all three Detroit auto makers will survive is out there, based largely on the inability of the debt-laden companies to get access to funding. General Motors is desperate enough for cash to consider merging with Chrysler. On Oct. 6, Fitch downgraded Ford Motor and Ford Motor Credit to CCC, the lowest junk rating. Deutsche Bank’s Rod Lache wrote Sunday that the auto industry may survive because of federal bailouts and restructuring. But, he wrote, “based on our belief that at least two of the U.S. Big Three automakers could reach minimum cash levels within the next 12 months, we continue to assess the risks to our universe.”
<MORE>
http://blogs.wsj.com/deals/2008/10/20/what-if-the-us-auto-makers-dont-survive/?mod=wsjcrmain


<snip>
October 13, 2008
U.S. automakers may face bankruptcy, analyst says

By JEFF GREEN and GREG BENSINGER
Bloomberg News

General Motors Corp., Ford Motor Co. and Chrysler LLC, the three biggest U.S. automakers, may be forced into bankruptcy as the global credit freeze damps U.S. sales, Standard & Poor's analyst Robert Schulz said.

"Macro factors could overwhelm them at some point" even as GM, Ford and Chrysler vow to stick with their turnaround plans, Schulz, S&P's lead automotive credit analyst, said in a Bloomberg Television interview. The companies said they have no plans to seek bankruptcy protection.

His assessment underscored the pressure on the industry as the worsening credit crisis makes it harder for buyers to get loans and for dealers to finance their operations. S&P said Friday that it may further trim credit ratings for GM and Ford on forecasts that 2009 auto demand will fall to its lowest level since 1992.

With all three companies working to boost cash, any bankruptcy filing would be a last resort, not a "strategic" decision, Schulz said.

"We don't see that as something they would choose," he said. Schulz said the "trigger" for a forced restructuring under bankruptcy protection would be based on the automakers' ability to preserve liquidity as sales decline. Industry wide U.S. sales slid 27 percent last month, the most in 17 years.

'Bankruptcy not an option'

"Bankruptcy is not an option GM is considering," spokeswoman Renee Rashid-Merem said Friday. "It's not in the interests of our employees, stockholders, suppliers or customers."

Operating-cash needs at GM, Ford and Chrysler are "substantial, so if it looked like they were going to be pushing toward that number because of these operating losses and cash usage, that's sort of the point where they'd have to consider" bankruptcy, Schulz said.

S&P said its debt ratings for GM and Ford, already at six steps below investment grade at B-, may be lowered again because the automakers face a "serious challenge" in 2009.

Barclays Capital reduced its target stock price for GM to $4 Friday, with analyst Brian Johnson citing dwindling global auto demand.

http://www.tennessean.com/apps/pbcs.dll/article?AID=/20081013/BUSINESS01/810130369/1003/news01

[stubtoe]

1. Wouldn't be the first time. Chrysler's been on life support for decades.

[FormerDittoHead]

2. They WANT bankruptcy so they can break their union contracts...

They've been driving those companies into the ground and getting out of the US for DECADES.

I can only imagine all of the people working for those companies in the last years saying how they should do more R&D in small cars, fuel efficiency, think outside the box and make different kinds of vehicles altogether, etc., but management says, NO!

What did I hear on NPR when gas went over $4 a gallon? "No one anticipated that gas would go up in price..." REALLY????

When he visited me last year, my brother rented a Chevy. In about 2 minutes, I saw about a dozen things they could have done better, and just by redesign, not by added (direct) cost. But they don't want to make safe, well designed cars that don't fall apart.

I KNOW they're not idiots, but they want us to believe they ARE. As soon as they get to break their union contracts, bankrupt their (worker) pension plans, etc., they'll be roarin' back to business as usual, selling cars which maximize profits by falling apart in 4 years or 80,000 miles...

[whistle]

3. Maybe nationalization of the auto makers is the answer

[FormerDittoHead]

4. Maybe...

I really think we SHOULD re-think some of the firewall between business and gov't.

My pet peeve is how the gov't pays businesses for custom software, when they SHOULD simply be hiring those programmers straight out, and then the gov't will own the software outright, rather than paying for it year after year.

But think about it:

The gov't already buys so many cars, trucks, buses, tanks, etc from these companies, and after all the expenses: design, engineering, materials, labor including their healthcare, these companies still make a profit to give to their owners.

So, why not simply employ (a portion of) those same people, pay them what they're making now and have them make what they're making now only saving the gov't the money that would be going to the owners who can't manage things right anyway?

Providing the Republicans don't get in there to spoil it as they wanted to ruin gov't in general, I don't see how much worse we, the people could do.

[whistle]

5. Plus enforcement of safety and mpg standards used on vehicles has been a game

...for over fifty years now. Nationalize the industry and just get these things done now. We also need a national transportation policy and plan to balance between mass public transport and private. Time to change this whole concept to fit the 21st century. I've owned some three dozen automobiles in my lifetime and it has always been primarily about convenience, reliability, safety and reasonable cost. I would be just fine with high speed magnetic levitation trains and Smart cars today.