General Motors boss Rick Wagoner has warned that the US economy would suffer a “catastrophic collapse” and that three million jobs could go if America’s car industry collapses.
His remarks come as Detroit’s Big Three – GM, Ford and Chrysler – renew their calls to the US Congress for a government bail-out.
Wagoner told a Senate panel that three millions jobs would go “within a year” and that government would lose $156 billion in tax revenue over three years. The car-makers are seeking $25 billion in loans to keep them afloat – something that’s opposed by the Bush administration.
“Such a level of economic devastation would far exceed the government support that our industry needs,” argued Wagoner. “This is about much more than just Detroit. It's about saving the U.S. economy from a catastrophic collapse.”
Wagoner wasn’t the only car industry executive speaking out. Alan Mullaly of Ford said “A decision to make government assistance available makes much more sense than taking the tremendous risk to our already-fragile economy that comes with inaction.”
Meanwhile Bob Nardelli told the Senate panel that “without immediate bridge financing support, Chrysler's liquidity could fall below the level necessary to sustain operations.” He added that, should the company fall into bankruptcy “we cannot be confident that we will able to successfully emerge.”
Recent analysis of GM and Ford’s third-quarter losses has suggested that both companies could run out of money by mid-2009.