Ann Arbor, Michigan – Researchers at the Center for Automotive Research (CAR) in Michigan report that the effect on the U.S. economy would be substantial if only half of the three Detroit-based automotive manufacturers’ U.S. facilities were to cease operations. CAR estimates that nearly three million jobs would be lost in the first year if there is a 100 per cent reduction in the three companies’ U.S. operations.

“Our model estimates that a complete shutdown of Detroit Three U.S. production would have a major impact on the U.S. economy in terms of lost wages, reductions in social security receipts, personal income taxes paid, and an increase in transfer payments,” said Sean McAlinden, CAR chief economist. “The government stands to lose on the level of $60 billion in the first year alone, and the three-year total is well over $156 billion.”

“To permit any of the Detroit Three manufacturers to collapse would scar the U.S. economy further at a time when it can ill afford another blow,” said CAR chairman David Cole. “The likelihood of one or two of the Detroit Three manufacturers ending operations is very real. As policymakers consider their positions on assistance to the auto industry, they must decide, is an ounce of prevention indeed worth a pound of cure?”

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