Detroit Three Failure Would Cost at Least 1 Million Jobs

By David Thomas  on November 13, 2008

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There has been a lot of talk about the Detroit Three — GM, Ford and Chrysler — going down the tubes lately. There’s even been speculation about all the jobs that would be lost as a result. It’s not ridiculous to think that many more jobs would be impacted on top of those directly related to the three companies, but we’re not sure how one creates such a figure. 

So, as we all go about yelling at our nightly newscasts for the next few weeks about a bailout, remember this: The Detroit Three directly create nearly 1 million jobs in the U.S. alone. Here’s the breakdown: 

U.S. Jobs

GM: 96,000, down from 176,000 in 2000
Chrysler: 49,120
Ford: 80,200 in North America.  Ford won’t break down the numbers for U.S.-only jobs, but it did say a vast majority of that figure are in the U.S.
Detroit Three dealerships: 740,000

Total:
965,320

So for the sake of argument — and my poor mathematical skills — let’s just say 1 million jobs. According to the Bureau of Labor Statistics, the total number of unemployed people through October in the U.S. is 10.1 million. If the Detroit Three went down, they would almost double the total unemployment figure so far this year, which is 1.2 million. The loss of another million jobs would send unemployment to 7.1%, assuming no other jobs were lost in sectors like retail, which is facing a bleak holiday season.

There is a huge supplier network that is completely intertwined with the Detroit Three, and if just one of the large ones, like Delphi, closes — with approximately 50,000 U.S. employees — you’re above that looming 1-million-jobs mark. And that’s just one of dozens of large and small suppliers across the country that would likely collapse along with the Detroit Three. That’s how we were confident enough to run that headline.

So how did that 2.5 million number you hear on the news come about? It includes suppliers as well as secondary jobs, like local bars, restaurants, real estate offices, etc. based in towns that rely on auto plants. Advertising agencies and publications that count on automotive ad revenue would also start laying off workers. Many have even suggested that businesses near car dealerships would be impacted.

We just wanted to point out that even the number of jobs you can positively account for is still massive and daunting, giving a real face, or a million of them, to the potential bailout — or bridge loan, depending on your point of view — being discussed in Washington. In comparison, the $122 billion bailout of AIG focused on a company with more than 100,000 employees, many of them outside the U.S. (that’s another company that doesn’t divulge country-specific figures).

If you have a strong opinion about bailing out the Detroit Three, you should contact your local congressman or senator.

Figures were supplied directly by manufacturers and NADA.


Managing Editor David Thomas has a thing for wagons and owns a 2010 Subaru Outback and a 2005 Volkswagen Passat wagon.  Email David


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