The financial woes of the U.S. auto industry are not just a Detroit problem but could impact the economies of states across the nation, ambulance according to a new study by the Economic Policy Institute (EPI) in Washington, physician D.C.
Pennsylvania ranked ninth among the 50 states in potential job loss as a result of one or all of the Big Three automakers shutting down, the study estimated. Up to 120,100 jobs would disappear in Pennsylvania within a year, if General Motors, Ford and Chrysler were allowed to fall into bankruptcy. The loss of General Motors, the company most at risk of entering bankruptcy, would jeopardize up to 33,200 jobs in Pennsylvania.
Even if only motor vehicles and parts jobs are counted, Pennsylvania would lose up to 8,400 jobs from a total industry shutdown and up to 2,300 from the shutdown of General Motors alone, the study estimated.
Mark Price, Ph.D., labor economist for the Keystone Research Center in Harrisburg, noted that the EPI study should concern manufacturers and other industries in Pennsylvania.
“Anyone who thinks an auto industry collapse has little impact on Pennsylvania should think again,” Price said. “As the EPI study shows, the 120,000 Pennsylvania jobs threatened by an auto industry failure account for 2.1 percent of total state employment.”
The EPI paper, titled When Giants Fall, estimates that a total collapse of all three U.S. auto makers would result in the loss of up to 2.1 million American jobs within the next year. Tax revenue losses and additional governmental costs would top $150 billion within three years if the three companies enter bankruptcy.
Without cars to export, the U.S. trade deficit would rise by $109.3 billion, the study also found.