Entire Economy Devastated if Big Three Fail, Report Says
December 16, 2008, 3:50 PM EST
Canada would lose a staggering 582,000 jobs by 2014 if General Motors, Ford and Chrysler were to collapse completely, a report prepared for the Ontario government shows.
The 11-page report paints a devastating picture of the economy not only in Ontario, but also across Canada should the Big Three automakers fail.
It indicates there would be a heavy negative impact from a 100 per cent production cut immediately that would continue to damage the economy until 2014.
If 50 per cent of production were cut there would be 157,400 jobs lost nationally and 141,000 lost in Ontario immediately. By 2014 there would be 296,000 jobs lost nationally and 269,000 lost in Ontario if half of current production ended.
The report was commissioned by the Ontario Manufacturing Council and prepared by the Centre for Spatial Economics. It outlines a far reaching negative impact on the economy if the Big Three fail.
It indicates a permanent contraction of the auto industry would negatively impact the global economy, reducing demand for Canadian exports from all industries. A bankruptcy of any of the three automakers would have serious implications for pension funds and retiree incomes and the study shows that more than 80 per cent of the parts industry would vanish.
There would be a housing slump that would impact construction, retail, insurance, real estate and financial services.
"For any Canadians who feel that the auto industry is expendable to our economy, this report is a wake-up call," Michael Bryant, Ontario's Economic Development Minister, told the Toronto Star.