7th Apr 2009, 10:52

That's not what would happen. Your numbers would indicate that every single person related to the automotive industry would lose their job, which is simply not the likely outcome. For one thing, some of those would include automotive parts sellers. If you look at the stocks of auto parts retailers, their numbers are through the roof. In a recession, consumers tends to keep and repair older vehicles versus sell and buy new ones. Many of these retailers are actually opening new stores to date. So in some cases, MORE jobs tied to the auto industry are being created.

Secondly, just because GM and Chrysler are going under doesn't mean auto workers have nowhere to go. Foreign brand manufacturers are setting up shop in the US even as we speak. VW has a new plant opening in Tennessee with parts manufacturing and steel plants joining that operation across state lines in Alabama. Toyota has a Prius and hybrid plant in the works. There has even been talks about a company called Mahindra opening a plant to manufacture their new line of small diesel trucks for the NA markets.

Additionally, many US parts makers have contracts with other companies. Delphi makes AC systems for Toyota for example.

So in reality, if GM and Chrysler went under, nothing close to 14% of the US workforce would be out of work. In all likelihood, many of those workers would find work elsewhere in similar fields.