America now faces another challenging economic decision -- whether Congress should approve an automobile industry bailout plan or just let GM, Ford and Chrysler possibly fail.
On the heels of the financial industry bailout, many citizens are not too accepting of another business bailout. We can understand these concerns of American citizens.
However, a failure of the Big Three domestic auto companies would have a devastating ripple effect across the American economy. Failure is not an option without significant and far-reaching impact throughout the United States and Canada.
We believe Congress should seriously consider and develop a significant auto bailout plan sooner than later.
Here's why:
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- Without a federal auto rescue plan, one or more of the Big Three domestic automakers could be forced into bankruptcy within months.
- If GM, Ford and Chrysler fail, nearly 2 percent of the American work force or 2.9 million jobs would be directly or indirectly impacted. This would be a significant jolt to the economy.
- If those 2.9 million jobs are lost, nearly $25 billion in federal income tax revenues and more than $20 billion in Social Security deposits will be lost.
- If any one of the three companies fails, it will negatively impact foreign car companies, like Toyota, Honda, Subaru, Nissan, BMW and Mercedes-Benz and their American production facilities and supply networks.
- Failure of the American auto industry will significantly slow the development of biofuel, electric and hydrogen technologies. This delay or stop would our drive toward energy independence.
- The auto industry crisis is already impacting local dealers and their employees right here in west central Minnesota. Sales are down, credit has tightened and some dealers have either reduced staff and/or their work hours.
While first reaction is to reject an auto industry rescue plan, wiser heads should prevail and look to the bigger picture, which reaches throughout America and into west central Minnesota.
We believe Congress should develop and pass a reasonable and workable rescue plan for the auto industry. Saving the auto industry is important for America and west central Minnesota.
