STUDY: Detroit bankruptcy would cost four times more than bailout

Filed under: Chrysler, LLC., Ford, GM, Earnings/Financials

The choices are: spend $15 billion in bridge loans now to keep the Detroit Two (GM and Chrysler, since Ford can apparently hold its own) from going bankrupt, or spend $70 billion over the next two years to pay for the fallout from the Detroit Two going bankrupt. Those are the numbers according to the Anderson Economic Group and BKK, which get to their $70 million number based on 1.8 million job losses and evaporating federal and state tax revenue. And that number still doesn't include things like the jolts to credit markets, consumer confidence and manufacturing and supplier bases, among other nuclear scenarios. The question now is: how are the two (or three) automakers going to divvy up the $15 billion and just how many strings will Congress attach?

[Source: Detroit News]

STUDY: Detroit bankruptcy would cost four times more than bailout originally appeared on Autoblog on Mon, 08 Dec 2008 17:29:00 EST. Please see our terms for use of feeds.

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