Source: The News Journal

Moody’s Economy.com chief economist Mark Zandi estimates that 2.6 million jobs — about 1.9 percent of the U.S. work force — would be lost if GM, Chrysler and Ford were to go under.

That includes more than 255,000 people directly tied to the three companies and another 2.3 million whose jobs are indirectly dependent — everything from people who work in the steel, glass, fabric, tire and electronic industries to the barista who makes $4 cappuccinos for the ad executive who’ll be out of work when his auto industry business ceases to exist.

Zandi argues the economy is too weak to absorb that fallout.

“This could be the thing to push us over,” he says. “The ripple effect is like throwing a big boulder into the economic pond.”

The auto industry is woven into the grass roots of the U.S. economy, through its dealer networks, the advertising it buys in newspapers and local TV and radio stations, the health care it buys for its workers and their families and the retirees it supports.

The domestic auto industry supports nearly 800,000 retirees and spouses with pensions and, until recently, health care for everyone. Now that’s being cut back for white-collar retirees, but if the automakers file for bankruptcy, they could shed their pension costs and force the government to pick up the tab.

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Technorati Tags: General Motors, Chrysler, Ford

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