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The Big Three, And The Rest Of Us
By Bizbox
We'll make it auto bailout day here on BizBox. In our last post, we dealt with what we thought was the National Federation of Independent Business's unhelpful hostility towards a hypothetical bailout. Though this wasn't our main point, we did mention that saving the Big Three--General Motors, Ford, and Chrysler--isn't just about saving the Big Three: it's about saving all the small businesses associated with them, and dependent upon them. The small bar in the town near the brake factory, we said, will go belly-up just as surely as GM will if there is no bailout.
Meanwhile, Business Week has run the census numbers to figure out just how many small businesses would be threatened by the big automakers' collapses. Its figure? 57,000. And those are just the companies that are explicitly car-related; that doesn't even include the small bar in the town near the brake factory.
The vast bulk of those 57,000--over 44,000--are new car dealers. In fact, many of these are going to go out of business anyway: GM has announced that it will sever ties with many in its dealer network, not if it doesn't get the $18 billion it is requesting, but if it does. However, saving GM will still keep plenty of dealers in business.
Besides the dealers, there are makers of parts, makers of tires, and makers of other ancillary things necessary to the manufacture of one of those things currently sitting in your garage.
"Those 50,000 companies should be at the heart of the discussion of any auto bailout," theBusiness Week author says. Indeed. Congressmen, senators, and federal regulators could do worse than to put the fates of the small businesses tied to the Big Three squarely in the middle of the bailout debate, both substantively and rhetorically. These same congressmen, senators, and regulators have over the past several months been accused, not unjustifiably, of overlooking the needs of small businesses in the favor of the biggest banks in crafting the financial industry bailout. Not making the same mistake as they attempt to save the auto industry will go a long way towards reassuring the country's entrepreneurs that their government is thinking of them, too.
Comments (0)December 3, 2008 3:21 PM
