Cafferty: Will Loss of Auto Makers Lead to a Depression?

From the Cafferty File: A top executive at Chrysler, Vice Chairman Jim Press, is warning that the failure of just one of the Big Three automakers could drive the U.S. economy into a depression. The CEOs of Chrysler, Ford and GM were back on Capitol Hill today asking for $34 billion in aid, just two weeks after they asked for $25 billion and were shot down. Ford CEO Alan Mulally quoted an estimate from Goldman Sachs during his testimony that said the failures of the three companies could cost the U.S. economy up to $1 trillion. Sure the companies need cash. And sure they directly provide jobs to 355,000 workers. And an additional 4.5 million jobs in related industries. But there are real questions about whether we would be throwing good money after bad. Detroit has failed to keep up with a changing industry for years, despite the handwriting that was clearly put on the wall by Toyota and Honda, among others. American cars come with legacy costs unrivaled anywhere in the industry. Sales figures released this week were terrible. GM down 41 percent, Ford down 31 percent. Congress is grappling with whether the cure is worse than the disease. Heres my question to you: Will the loss of any one of the Big Three auto companies lead to a depression?

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YouTube | December 5, 2008

Tags:. .mulally. .handwriting. .cafferty. .trillion. .grappling