“It’s going to be an absolute bloodbath”
President Barack Obama’s Auto Task Force this week rejected a request from two national organizations of auto-parts suppliers for up to $10 billion in loan guarantees. Task Force member Ron Bloom told industry representatives that Obama favors bankruptcies and the “contraction” of the industry— that is, tens of thousands of layoffs. “Consolidation for the industry needs to take place,” Bloom is reported to have said.
The Canadian government has also rejected assistance to the industry. Currently there are about 400,000 auto parts jobs in the US, and another 100,000 in Canada. At least a third of these workers will confront layoffs within the next year or two.
“The carnage will be occurring in the next 60 to 120 days,” said Craig Wiggins of the auto consultation firm Tooling & Capital Solutions of Tecumseh, Ontario. “It’s still going to be an abolute bloodbath.” Wiggins was involved with the loan negotiations taking place in both Washington and Ottawa.