Be careful what you wish for. Even a successful auto industry restructuring will involve substantial headcount cuts, deepening the recession underway. A Bloomberg story tallies the likely damage;
While the loans may spare General Motors Corp., Ford Motor Co. and Chrysler LLC from collapse, shrinking their workforces would sap an already weak economy, said Paul Ballew, chief of consumer insight and analytics for Nationwide Mutual Insurance Co. in Columbus, Ohio, and an adviser to the Federal Reserve.
“The degree of restructuring is much broader and much deeper than people assume,” said Ballew, a former GM sales analyst….
Because the industry’s employees are among the best-paid in the U.S., the elimination of one auto worker amounts to erasing 1.7 jobs because of the loss of purchasing power, [economist Robert] Scott said…
GM told Congress it projects trimming its workforce by as many as 30,000 employees by 2012, or 33 percent. Dealers for the biggest U.S. automaker would fall to 4,700 from about 6,500.
Job losses at the dealerships might be 100,000, Scott said…..
Television stations and advertising agencies likely would suffer from GM’s strategy to focus on just four of its eight brands and Ford’s push to emphasize its namesake nameplate.
“If the dealers go out, that is the biggest local advertiser in virtually every market, with nothing obvious to replace it,” said Kip Cassino, research director at consulting firm Borrell Associates in Williamsburg, Virginia.
Local television stations get 25 percent or more of their advertising from automakers, dealers, and dealer associations…
Fewer brands and models will translate into more pressure on suppliers’ employment, which fell 18 percent through June to 590,000, according to the Motor & Equipment Manufacturers Association. Ford, the second-largest U.S. automaker, wants to pare its global purchasing base to about 750 companies from 1,600….
Cutbacks already are being felt at railroads such as Norfolk Southern Corp., the biggest U.S. carrier of vehicles and parts. Auto shipments by rail are down 20 percent in 2008.