Big Three automakers stay alive

December 29, 2008
The weakest of the Detroit Three, Chrysler LLC and General Motors Corp., said they would run out of cash in 2009, potentially eliminating tens of thousands of jobs in Indiana alone.

Chrysler and GM together have almost 10,000 employees in the state, and support dozens of independently owned suppliers. Chrysler employs 5,400, most of them at a transmission plant in Kokomo. GM has roughly 4,300 employees in Fort Wayne, Marion, Bedford and Indianapolis.

Initially opposed to rescuing domestic car makers, the Bush administration on Dec. 19 offered $17.4 billion in loans in exchange for concessions from the car makers and their workers.

If GM, the top-selling U.S. car maker, and No. 3 Chrysler were to sink, economists predicted, they would take suppliers down with them, leaving Ford Motor Co. stranded. One Democratic-leaning think tank, the Economic Policy Institute in Washington, D.C., said the fallout from an industry collapse would be worst in Michigan and Indiana. Up to 5 percent of the 2.9 million working Hoosiers, including many who work in the finance and insurance fields, could lose jobs.

The saga began with the credit crisis pushing auto sales down by double digits. In November, sales fell 37 percent, to 10.2 million, the lowest level in 26 years, according to Autodata Corp. in Woodcliff Lake, N.J.

GM, which counts its quarterly losses in the billions, looked to a merger with Chrysler parent Cerberus Capital Management, but the U.S. Treasury turned down its plea for $10 billion to finance the deal.

Central Indiana auto workers, already battered by layoffs, began 2008 looking forward to relief in the form of a $530 million transmission plant that was to open in Tipton. Chrysler supplier Getrag was building the plant to make dual-clutch transmissions and was expected to hire as many as 1,400 workers from Chrysler's Kokomo plant. The deal fell apart after Chrysler sued Getrag over financing for the plant, which forced Getrag to file for bankruptcy protection.
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