The Domino Effect and You - Tire Review Magazine

The Domino Effect and You

Interesting story in the WSJ today concerning the future of GM and Chrysler, which are teetering on the verge of bankruptcy.

WSJ suggests that GM and Chrysler may not have enough cash to make it another year, and that the current credit crunch is making matters worse.

Not that both companies haven’t done enough foot-shooting, but the potential loss of these giants would be more devastating than one would initially consider.

There is the obvious job loss issue, tens of thousands of people could be put out. And the lost local tax revenues that would strain local government coffers. Reaching to the next level, there are all of the suppliers that depend heavily – maybe a bit too heavily – on GM and Chrysler, billions and billions of dollars worth of components….and tires.

And there is the unconsidered impact. If GM and/or Chrysler go down they could take a number of other automakers with them. If certain auto suppliers end up taking a header because of their downfall, the demise of GM and Chrysler may end up drag others into the abyss, as well.

The global financial-economic morass is far from settled, and each day reveals just how this seemingly far-away matter will hit all of us.

If you have comments to share, send to me at [email protected].

– Jim Smith

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