What happens to automotive industry affects us all

Given the recent headlines regarding the U.S. auto industry, I felt a sense of urgency to write with the hope of raising the awareness of the facts of the imminent crisis facing Detroit’s three automakers.

Even as an employee of a dealership in Bangor, it is difficult to imagine the magnitude of possible loss that our country, state and local economies would suffer if a U.S. auto industry collapse occurs. So from the outsider’s perspective, the consequences must be unimaginable. Allow me to share some facts taken from General Motors communications on the issue.

From plants to local parks, from dealerships to driveways, from gas stations to grocery stores, one out of every l0 people in America is employed in a service that is related to the U.S. auto industry. What happens in the automotive industry affects each and every one of us. There are some 14,000 U.S. brand dealers in cities and towns across the country, employing approximately 740,000 people, with a total payroll of some $35 billion. And according to a 2008 Center for Automotive Research memorandum, the collapse of the U.S.-based auto industry would account for a direct, indirect and spinoff employment drop of 2.95 million people in the first year alone, and a personal income drop of $150.7 billion.

The cost to local, state and federal governments could reach $156.4 billion over three years in lost taxes and unemployment and health care assistance.

Domestic automobile production would more than likely fall to zero – even by international producers due to supplier bankruptcies.

The credit crisis that is affecting us all is wounding the U.S. auto industry in many different ways. Carmakers can’t get loans to restructure and to produce new advanced technology vehicles. Suppliers and dealers can’t get loans for routine business and customer can’t get loans for new cars.

Some auto critics say that the industry has not done enough to save itself. They could not be more wrong. The auto manufacturers have been investing $l0 billion in plants and equipment each year. The quality gap has been all but erased between U.S.-based and foreign manufacturers. And new labor agreements that will put the domestic industry in line with our foreign competitors will take effect in 2010.

The suggested short-term loans – not a bailout – sought by the Detroit manufacturers would have an immediate positive impact on our industry as well as our economy.

We are at a crossroads, where given the opportunity, our nation’s auto manufacturers can lead once again. In 2010 we will see labor and health care reforms kick in. We will also see new electric vehicles introduced that will help reduce our nation’s dependence on foreign oil. And if it weren’t for the recent credit crunch, these companies would be on the road to success.

If Congress does not act, the future our country faces during this downturn is clear. We will see even more economic upheaval, communities will lose substantial businesses and revenue, and thousands of jobs will disappear. It will be the shortest and fastest road from recession to depression.

It is critical that we as Americans come together and urge our representatives in Washington to support GM and America’s domestic auto industry.

Matthew Campbell of Carmel works for Varney Buick Pontiac GMC.