So the US automakers, General Motors, Ford and Chrysler are pleading for a bailout of US$25bn in loans to keep their business afloat. However, there is still continued opposition from the US government about bailing out these dinosaurs that are inefficient etc etc.
Perhaps I’m idealistic but isn’t helping the economy really about saving and creating jobs?
True, the value-add and the GDP contribution of the automotive industry to the US pales significantly relative to the contribution of the financial services industry. And true, the US automotive companies can definitely be more efficient as compared to the Japanese, Korean and possibly even the Chinese automotive manufacturers.
However, in perspective, the automakers are asking for a US$25bn to save about 1.7million jobs*. This, compared to the US$700bn package to save the financial services industry which employs 6.2million people**. Maybe, this bailout package may be the straw that helps the US automakers become more efficient? But who knows?
Perhaps Ms. M who works on statistics and Ms. F who works in the automotive industry can help shed further light on this…
* I added up the figures in line 21 (motor vehicles, trailers and parts) and line 22 (other transportation equipment). Obviously, this figure will likely be a lot more if one adds up the figures for the ancillary services to the automotive industry.
** Figures taken from line 51 (Finance and Insurance).