Cost of possible GM-Chrysler deal ? Huge loss of jobs

  • Associated Press
  • Wednesday, October 29, 2008 7:03pm
  • Business

DETROIT — If General Motors Corp. acquires Chrysler LLC, it will cost 25,000 to 35,000 jobs at the automakers, according to a Michigan consulting firm.

But the Anderson Economic Group of East Lansing said Wednesday the alternative of Chrysler being sold in pieces would result in many more job losses. A GM acquisition, with possible help from the federal government, is a likely possibility, Patrick Anderson, the firm’s chief executive, said in a conference call with reporters.

“It’s a much bigger job loss and a much bigger taxpayer hit if Chrysler simply goes out of business or is dismantled,” Anderson said.

Chrysler employs about 49,000 people in the U.S. and has about 125,000 retirees and spouses.

Michigan, home to Chrysler’s Auburn Hills corporate headquarters, would be hit hardest if there was an acquisition. The state would lose 8,000 to 10,000 factory jobs, and the bulk of the 10,000 to 15,000 lost white-collar positions would be in Michigan, Anderson said.

Other Midwestern states would lose 10,000 to 12,000 factory jobs, he said.

GM has been talking with Chrysler owner Cerberus Capital Management LP about an acquisition, and GM has been lobbying in Washington for the federal government to put money into the deal.

All three U.S.-based automakers are burning up cash because of an auto industry sales meltdown caused by the U.S. economic downturn, but Chrysler and GM are considered to be in the worst shape. Industry analysts say Chrysler could go into bankruptcy next year if it doesn’t take on a partner or isn’t acquired by another automaker.

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