Cafferty: Will Loss of Auto Makers Lead to a Depression?

From the Cafferty File:

A top executive at Chrysler, Vice Chairman Jim Press, is warning that the failure of just one of the Big Three automakers could drive the U.S. economy into a depression.

The CEOs of Chrysler, Ford and GM were back on Capitol Hill today asking for $34 billion in aid, just two weeks after they asked for $25 billion and were shot down.

Ford CEO Alan Mulally quoted an estimate from Goldman Sachs during his testimony that said the failures of the three companies could cost the U.S. economy up to $1 trillion.

Sure the companies need cash. And sure they directly provide jobs to 355,000 workers. And an additional 4.5 million jobs in related industries. But there are real questions about whether we would be throwing good money after bad. Detroit has failed to keep up with a changing industry for years, despite the handwriting that was clearly put on the wall by Toyota and Honda, among others. American cars come with legacy costs unrivaled anywhere in the industry. Sales figures released this week were terrible. GM down 41 percent, Ford down 31 percent. Congress is grappling with whether the cure is worse than the disease.

Heres my question to you: Will the loss of any one of the Big Three auto companies lead to a depression?

Category:

News & Politics

Tags:

• Jack
• Cafferty
• File
• Auto
• Makers
• Depression

[egrimnes]

The public is not stupid for not voting for Ron Paul, he didn't do a convincing enough job of swaying the average voter. He like to point fingers alot.... I would love to see him get down and dirty and actually do something. All I here from him is a lot of talk. What he says at times makes sense, but again... it is only talk.

[neverine2000]

So the opinion of viewer's doen't matter.... hello, you are a viewer too....

[EMUmonster]

had they not bailed out Chrysler or GM it would have such a devestating effect on Michigan and the entire us. The US would have been hurt worse than the housing crisis, but Michigan would have been a one state depression. Im glad they bailed out the big 3. I live in Michigan in metro Detroit, and had they not bailed us out the unemployment rate would have been so bad here. Its already bad but there would be robbings and shootings daily. So many people would have been out of a job.

[drewd1987]

Because laissez faire is the only logical solution. Print more money? Depreciate the dollar more and bailout these companies,placing more tax on the citizens already broke? OK smart move.........

[drewd1987]

Really? We landed on the moon huh?...

[johnspawnflash]

What happen to the money that we gave them 6 years ago to build a better car I know what chevy did with it wasted it. GM made a car that would have saved GM and cut fuel cost setting a stander for all the auto maker's but with the high sales and profits from SUV's they trashed them now their begging for more money. Save the workers jobs but make GM use the blue prints they have for the car they trashed. Mr. Dobbs ( CNN )reported about this on his show once.

[njattack]

It will NOT bring about a depression.

It will benefit the American people & country as a whole. Currently, these 3 auto companies are corrupt and anti-American. They are trying to destroy the solidarity of the U.S. and they discriminate against white Americans. The communist controlled UAW labor is being paid twice that of any other auto company.

Bankruptcy is the only feasible and correct solution.

[homeskil6850]

can you say UAW? lay the blame where it should be

[roamershaker]

remember the chevy VEGA,,..,lol

[roamershaker]

welcome to my world ... lol;.;.maybe these auto workers will work for 16$ or so, like i did for 35 years as a carpenter;. at times with no insurance ;.;. maybe they can bail me out;.;.lol

[rumpole33]

that $34B can buy up the stock of all 3 co.s. anyways, even if the money was given to them, they would still close down factories/parts mftrg facilities here in the US & open them up in mexico. if they were really serious about endearing themselves to the amrcn public(not just selling 1 corp jet here & there), they would have offered to close down most of their foreign factories/parts mnftcrs & do at least 75% of their production in the US in order to hire as many americans as possible.

[Plutonwolf]

Because the Japanese Government heavily subsidizes their Auto makers.