Thursday, December 18, 2008

JOBS | Maloney–NYS Lost Big from Big 3 Shutdown

A feud of sorts has broken out between Tennessee and Michigan. A Tennessee senator led the battle against approving a proposed bailout of the Big 3 auto companies. Tennessee is the home of some automobile factories owned by foreign-based manufacturers.

Joining the argument now on the side of Michigan, Rep. Carolyn Maloney (D-NYC) has issued a report that reminds New Yorkers that 150,000 New York State jobs are dependent on the U.S. auto industry. Of this figure, 3,000 jobs are in GM and Ford plants. The rest are in auto parts and other suppliers of goods and services to auto manufacturers, dealerships, and indirect losses from suppliers of goods and services to the auto workers who lose their jobs.

The job loss would be the largest single-year loss since 1991, says Rep. Maloney, using data from an Economic Policy Institute report. The EPI report provides data to show NY State could lose 144,600 jobs if the Big 3 shut down -- out of 3.3 million jobs at stake nationally. The NY State comptroller has predicted that New York could lose as many as 225,000 jobs over the next two years. The 150,000 possible lost jobs would presumably be in addition although there may be some overlap in the projection methods.

A Bush Administration spokesperson has argued that a fallback possibility (given that the outgoing Senate refused to vote for an auto industry bailout) is for an "orderly" bankruptcy of GM and Chrysler instead of a bailout. President Bush on December 19 announced $13.4 billion emergency loans to GM and Chrysler, with $4 billion more in February, provided the companies develop reorganization plans that show they can become profitable soon.

This is what Rep. Maloney has been calling for, i.e., immediate use of some of the TARP funds to buy time for the automakers. Ford is not in such dire straits as the other two of the Big 3 and can reportedly operate for another year without government support, but joined in the request for immediate aid.

Rep. Maloney is among those who have been mentioned as possible candidates for the NY State Senate seat that is expected to be vacated by Sen. Hillary Clinton when she takes up the position of Secretary of State in the Obama Administration.