December 2, 2008
The deepening recession and credit crisis have severely constricted demand for new cars and has led to a significant decline in sales for all automobile manufacturers. The U.S. based auto companies have drained their cash reserves and face liquidation if Congress fails to act.
The effect of liquidation will be devastating to our economy. According to the Center for Automotive Research, three million U.S. jobs are at risk if the auto companies go under. Many are Machinists Union members who work at assembly plants, parts suppliers, and dealerships. Countless indirect jobs in communities across America would also be affected. Local, state, and federal tax revenues would decline, further reducing the ability of the U.S. to respond to the current economic crisis.
An additional impact would be felt from the loss of innovation as engineers involved in new research on environmentally friendly vehicle technologies lose their jobs. U. S. automobile manufacturing would then mirror the Mexican model; a place for foreign manufactures to take advantage of cheap labor, while the development of future wealth producing technologies remains abroad.
In these perilous economic times we cannot afford to kill a key engine of our economy. While some supporters of the nonunion foreign transplants have used this crisis to attack unions, it is important to acknowledge that the UAW and the U.S. automobile companies have restructured their collective bargaining agreements to put labor costs in line with the foreign transplants. The IAM supports efforts the ongoing efforts in Congress to provide financial assistant that will enable the American automobile industry to survive.
