According to a study by the Center for Automotive Research, more than 1.3 million U.S. jobs and up to $68.7 billion in personal income could be lost in the first year if Chrysler and General Motors go through a “lengthy and disorderly” bankruptcy.
The study said that employment and production would fall by 90 percent and that other automakers would resume full production in the second year, reports Automotive News.
So what is a successful bankruptcy to the Center for Automotive Research? One in which both companies emerge from bankruptcy protection in three months “with capital and ownership structures that allow them to resume vehicle production and continue operations.”
“Our model estimates that a successful bankruptcy process for both GM and Chrysler would have a major impact on the U.S. economy in terms of the maintenance of wages, social security receipts, personal income taxes paid, and a reduction in the need for transfer payments,” said Sean McAlinden, the center’s chief economist.
– By: Omar Rana