US auto industry in dire straits

Green car congress has a post up about a report prepared by Center for Automotive Research (CAR) in Ann Arbor, Michigan. It doesn’t look good. They are predicting between a 100% to 50% contraction of the industry.

For the second scenario, CAR assumes that Detroit Three production and employment falls by 100% in the first year but recovers to 50% in the second and third years. CAR assumes essentially the same first year supplier crisis for all automakers in the United States, with production by the international automakers falling to about 50% in the first and second years. CAR also assumes that the international producers would recover fully by the third year and that the surviving Detroit companies would restore production to 50% of the former combined level by the second year and maintain this level in the third year.

The 50% scenario results in a first year total employment impact of a loss of nearly 2.5 million jobs in the US economy, comprising 239,341 jobs at the Detroit Three; 795,371 indirect/supplier jobs; and more than 1.4 million spin-off jobs. The employment picture recovers in 2010 (1.5 million lost) and 2011 (1.0 million jobs lost), due to the resumption of US production by the surviving Detroit Three producer and international automakers, and the process of dislocated workers finding new employment.

2 replies on “US auto industry in dire straits”

  1. Looks good to me ,you were the one who said last year that as far as the auto industry was concerned, it was (then ) the beginning of the end for them. Too many manufacturers , too many models , too much advertising, too many resources spent on a wastful regime , so its demise should be welcomed!!

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