The auto industry in earlier times employed over 600,000 individuals and after the bust there may remain a force of only about 40,000 employed. What does that mean for Michigan? The State is looking at huge budget problems trying to meet the tax shortfall that will be created by the job losses. Police, schools and emergency services may be hit hard. Healthcare will suffer, retail sales will plumet, property values already down will become frozen and drop futher and a wide array of support jobs will vanish as the “multiplier effect” that comes into play when core jobs are created works in reverse as auto jobs are lost.
The liquidation of well over a million vehicles, in what has been a poor market for vehicle sales, will negatively impact Ford and foreign manufacturers. Some have predicted that the sell off will cause massive layoffs as production is decreased, and that prices may increase on other vehicles in response to the disruption.
While no one knows just how bad things will get, it is clear that even under some of the most optomistic scenarios Michigan will be suffering over the next several years, and Michigan’s losses affect us all. The black hole that will be created by primary and secondary job loss in Michigan will ripple through the State and adjoining states. The job losses from the closure of hundreds of dealerships will hit many more states at a time when job retention is critical.
There will be more waves in time as iron ore mining, steel, aluminum and parts manufacturing plants are hit. Regardless of your ideology regarding the necessity for the market to allow such failures, expect the adjustment process will be painful for many.
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I’m sure Michigan will be suffering over the next few years. I think the question is how many, and it’s a difficult one because I don’t think we have any similar period for comparison.
The auto industry problems will also be felt across the border in Canada, in the auto manufacturing towns there.
From 600,000 to 40,000. I think we can have an idea on how many will lose their job in the coming future. Before there was a recession, there are already too many people who are looking for jobs. This is now a challenge for everyone to survive with this kind of economy.
Yeah, and my point with the California failure posting is that this thing is growing by leaps and bounds. It doesn’t appear that in the near term future things are going to get better, so I guess that it is time to hang on tight.
Calling this a black hole is a grim description of the situation but I have no doubt that it is the best way to illustrate the effects of plant closures in Michigan can impact neighboring states and secondary jobs.
Not to keep everything on the low, the best ideas always come out of the hardest of times. “Necessity is the mother of invention”.
In Canada, a car manufacturer is producing electrical vehicles and though the government has been less than supportive, the company has a back order in sales. They are now looking to expand the use of the vehicle for long distance travel. Maybe someone can look to this company and perhaps raise funds to establish a plant in Michigan. That’s my optimism shinning through.
Too bad chrysler was so committed to the big cars, if they had invested in hybrids they would be booming.
I was surprised to hear that the plant that makes the new Camaros is doing well with that model. I wouldn’t expect a sports car to thrive in this economy. I’m sure some people will go for it based on nostalgia, if operating costs is less of an issue with them.
And I wonder how long the price of gas will stay where it is?
of course it will be painful for the affected ones..just wondering what the government will do in order to help those unemployed ones..
I guess, that is something we have to watch out lyka, what will the government do with all these unemployed? If ever this happens, it would surely affect our economy. So, I guess we all have to prepare ourselves for whatever challenges we may face in the future.
I am sorry to say but why are we looking at government for unemployment caused from private sector. Govt. today is playing a role to satisfy it’s vote bank. Let water find it’s own level and things will settle down. We need to put pressure on Govt. for putting in place tighter control and regulations so that the root cause of current situation can be addressed.