Thousands of jobs hang in the balance as the fallout from the failed US government auto bailout begins to play itself out.
The fallout to the Detroit Big Three's possible demise is being debated all over the world. Those concerned are chatting about worst case scenarios, and a few have cropped up. One of them involves Chrysler closing down 29 plants, getting rid of 53,000 workers and defaulting on paying its $7 billion bills to suppliers. This scenario would play itself out immediately.
GM could pose similar problems for its 96,000 workers and 47 US plants. Already having hired a bankruptcy attorney, GM is bracing itself for terrible times, worse than what it's going through at the moment. Workers have already been warned of possible production cuts, announcements of which would be made today. As many as 40% of GM's 6,500 US dealers could be closed in the aftermath, according to Martin NeSmith, a member of the GM National Dealer Council.
Although it may not seem that way, this isn't exactly good news for a somewhat healthier Ford and foreign automakers. They would also feel some squeeze if suppliers of both Chrysler and GM disappeared, since about 70% of GM's suppliers are also Ford's suppliers. Asian automakers share an estimated 58% of the supply chain with GM. It's believed if no bailout of any kind happens, then GM could start shutting down as early as next week.
It's not only the US that would suffer of course, these three companies are multinationals with workers, suppliers, dealers, manufacturing plants, advertising agencies, financing partners and so on, in many countries around the globe. Hundreds of thousands of jobs and indeed industries hang in the balance.