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Originally Posted by Silvertwinkie  Didn't the big 3 saddle that off to the unions to manage. I thought the put a ton of money into the pensions, then left it to the unions to manage and grow.
I agree fully that it is a national security issue, as it would be for nearly any bellwether stock that manufactures essential machines. Back in WW2, there were no new cars for a number of years cause the car companies built tanks and such. In the global world we find ourselves in, it's a bit more complicated, but the undercurrents are the same.
To bad we don't have the same philosophy when it comes to domestic and renewable energy vs. foreign energy supplies which only make others wealthy and dangerous to us.  |
100,000,000,000 just for the "Pensions only" if just GM fails!
The government has an interest in making sure automakers survive because of huge pension plans that it would have to insure, and the huge number of jobs that could go away if one of the companies goes bankrupt.
Chrysler employs about 49,000 in the U.S. and has roughly 125,000 pensioners. GM has 177,000 U.S. workers and around 500,000 people receiving pensions.
For each auto manufacturing job, there are 7.5 jobs with parts makers and other companies, according to the Center for Automotive Research in Ann Arbor. Chrysler alone accounts for 318,500 to 392,000 jobs, while GM and Ford account for 2 million each, the center said.
David Cole, the center's chairman, said the industry may need $15 billion to $20 billion in unrestricted federal aid to stay afloat long enough to outlast the economic downturn and take advantage of an auto sales resurgence.
"You're looking at a rather nominal amount compared to the cost of a failure," Cole said. "You have to look at that as a good investment, an old ounce of prevention is worth a pound of cure."
He estimated that it could cost the government more than $100 billion if GM or Ford go into bankruptcy from
pension obligations and the loss of people paying income taxes and instead receiving government benefits.
Nate Bailey, spokesman for U.S. Rep. Joe Knollenberg, R-Mich., whose district includes Chrysler's Auburn Hills headquarters, said Knollenberg has been in touch with auto executives and the administration to "ensure the auto companies get everything that they need to protect jobs and move forward."