If Detroit falls, foreign makers could be buffer

The failure of one or more of Detroit8217;s Big Three automakers would put a huge initial dent in American manufacturing, but in time foreign car companies would pick up the slack by stepping up production in their plants here, many experts and economists say.

Whether Washington should let that play out 8212; risking hundreds of thousands of jobs 8212; is a central question Congress will weigh this week as it hears testimony from Detroit leaders who are pushing for immediate federal intervention, before the next administration takes over in January. 8220;Barack Obama has made it clear he understands the importance of the industry. The question is, do we get that far?8221; Ron Gettelfinger, head of the United Auto Workers, said in an interview Friday, raising the prospect of a General Motors bankruptcy. 8220;At this juncture, we are in a crisis that could have a major negative impact on this country.8221; But many industry experts say the big foreign makers are established enough to take control of the industry and its vast supplier network more quickly than is widely understood. 8220;You would have an auto industry in the United States more like that of Mexico and Canada: foreign-owned,8221; said Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Mich., which describes itself as a nonprofit organization that has 8220;strong relationships with industry, government agencies, universities, research institutes, labor organisations8221; and other groups with an interest in the auto business.

The transition to that new equilibrium would be painful. The big American firms employ about 240,000 workers, and their suppliers an additional 2.3 million, amounting to 2 per cent of the nation8217;s work force. The outright failure of GM would eliminate the biggest auto employer and more than 100,000 jobs. That is roughly the number of jobs already lost this year at the nation8217;s automakers and their suppliers.