We need to bail-out the big three auto companies because they are so important to the US economy, or so we are told. The data used to support this argument has been used extensively. 14 million or 1 in ten jobs in the US are associated with the auto industry, but a small story in the NYT suggests that the facts are being stretched. This is good journalism.
http://www.nytimes.com/2008/11/19/business/economy/19jobs.html?_r=1&adxnnl=1&adxnnlx=1227100934-KzWtW+JvHNQcJeNbz/QCww
We now find that these numbers are based on a 2003 study which used data from 1998-2001. The auto industry has declined as a source of employment since then. The data are also based on all auto manufacturing not just the three US automakers. The foreign auto manufacturers have extensive plants in the US and may actually expand their operations in the US if there was a downsized GM. The study also finds that many of the jobs would be recovered over time.
So what would be the extent of a GM, Ford, and Chrysler failure? Hard to say because there will be downsizing during a recession in any case and a bankruptcy does not preclude further manufacturing. Clearly, there will be strong effects across the entire economy but we do not have the facts.
Be careful of any data thrown about. The more precise the number the less likely it is correct.
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