It is important to realize those who will be most affected are those who will suffer job losses. By far, they stand to lose the most. To understand the dynamics, one must understand who the players are. For purposes of this paper, the term "automakers" will apply to those in upper management and those in executive positions within the automotive industry. The unions play a large role in both the potential outcomes as well as the members they represent. There are also the workers who show up each day to assemble the automobiles that travel American roads on a daily basis. Most would agree that the majority of those workers have been stressed far longer than the Congressional hearings having been present on every major news network. They have lived with these fears and uncertainties in ways most of us cannot comprehend. To put it in perspective, the United Auto Workers union, UAW, says that only 5% of the costs associated with every car manufactured are used for wages of all automotive jobs, with the exception of executive jobs and engineering jobs. That certainly begs the question as to why layoffs are the first line of defense in protecting the large automotive companies when times get tough. Of course, basic math dictates if fewer cars are being sold, then fewer workers are needed. That argument has merit, but when listening to the hearings in front of Congress in recent days, the automakers would have us believe their employees are where the lion's share of profits is doled out.
If the automotive industry takes a major fall because of bankruptcies, the repercussions might include a spike in the number of bankruptcies. A continued rise in unemployment, which is near record-breaking numbers, with the most recent figure released by the U.S. Government at near 6.5%, and more foreclosures, would surely follow. Families would cut back on their spending, even more so that what most are already doing, and it is even possible small things like gardens and even bartering may become viable options as people vie for a limited number of available jobs. Those searching for automotive positions would probably fare better spending their time searching for a genie's lantern.
The psychological effects will be deep and long lasting. Contrary to popular myth, there was no spike in the number of suicides during the stock market crash and subsequent depression of the 1930s and early 1940s. That urban legend is probably a result of several Wall Street executives who panicked when the Dow suddenly and unexplainable dropped and nearly bottomed out. People committed suicide before a glitch in the system was discovered. All this happened within a ninety-minute timeframe. Although the possibilities may slightly rise, suicides are not considered high risk during economic times such as these. In another comparison to the depression era, divorces did not show a rise either. This is explained due to two factors: no one could afford attorneys to handle the divorces and even separations were not feasible due to families struggling to keep one household going. The thought of managing two households was not only ill advised, but irresponsible too. It remains to be seen if there have been higher divorce filings with the current state of the economy. The possibility of the three major automakers filing bankruptcy would certainly add the necessary stress levels, fears, and desperation that usually combine and force a couple into court seeking a divorce. At a minimum, many families will feel the strain in their budgets and even when these problems don not lead to divorce or separation, it certainly adds tension to a family that is already affected by job losses. It is realistic to believe children are affected. They are so inquisitive and intuitive, even when they cannot quantify these feelings of uncertainty. After some of the psychological effects begin to seep in, many suffer other physical health problems that often go untreated due to the lack of insurance and money. Headaches, ulcers, and insomnia are but a few of the physical manifestations.
Considering all of these points, and then stepping back at a look from a distant perspective, a few other facts may become clear that will build further resentment the public already feels towards the automakers. Many believe, and even the CEOs have partially admitted, the lack of proper management has played a role in this latest financial disaster. Of course, no one can blame any one person or group of people for their own personal problems, but it does make you wonder had finances been better handled on the higher administrative level, perhaps a solution could've been found before the finality of bankruptcy becomes the only "out".
Looking into the future is difficult to see how the tide can finally turn. This vicious cycle appears to have taken a tight grip on the entire U.S. economy. Fewer jobs means less money spent on automobiles, if no one is buying the automobiles, the automakers cannot begin to rebuild. If the automakers cannot rebuild, they can begin to build up their employment rosters; and so the cycle goes.
