While hardly any Connecticut companies make car parts for the Big 3, about 25,000 Connecticut jobs, or 1.5 percent of overall jobs in the state, are directly tied to the automotive industry, specifically in retail sales and service. Because of this, the success of a proposed $14 million bailout plan for the Big 3 could determine whether several thousand Connecticut workers lose their jobs, according to an article by the Hartford Courant.
If the Big 3 were to shut down, Connecticut would lost about 31,200 jobs, or 2 percent of the state’s employment, through direct and indirect jobs. In comparison, Michigan – the biggest automotive state – would lose about 407,300 jobs, or 8.9 percent of its workforce, while Indiana would lose about 5 percent of its workforce and at least four states in the South and Midwest would lose 4 percent of their jobs.
Connecticut has 300 new-car dealers, and more than half sell products made by GM, Chrysler or Ford. So far this year, 30 dealers have closed or merged with other dealers, forcing dealers to fire more than 700 workers. DriveSol, which makes steering shafts for SUVs, laid off 200 workers alone this year.
The losses also are affecting the Connecticut State Treasury, as tax revenue from motor vehicle sales, which totaled $371 million last year, were down 7 percent the first half of this year.
While the future of a potential bailout package is still unknown, those in the automotive business in Connecticut think it’s a necessary step to help save jobs locally and nationally and give banks an incentive to approve loans for potential buyers.
“The banks are afraid to loan money unless they’re sure that the automotive industry is going to be there,” James Fleming, president of Connecticut retailers group, said in the article.
Even if a bailout is approved that could potentially save jobs and revive consumer confidence, many in the industry feel car makers are going to have to change their ways if they want to survive in the long run.
“When things are really bad, you don’t worry about tomorrow because you may not survive that long,” Fred Carstensen, director of the Connecticut Center for Economic Analysis at the University of Connecticut, added. “We want an orderly process of shrinkage. You want it to occur in a way that does not exacerbate the current crisis or inflict collateral damage way beyond what would happen in the normal process of restructuring an industry.”