While there’s no automobile exchange traded fund (ETF), the implications for the economy and other ETFs are large if the Big Three fail are wide-reaching.
Congress will begin their debate over how to help General Motors (GM), Ford (F) and Chrysler LLC before the economy takes another hit.
Chris Isodore for CNN Money explains that the Big Three of Detroit are next in line for federal aid in the form of $25 billion in loans until 2010. Around 1.6 million jobs are under the Big Three and all three automakers are at risk of losing money in 2009 if there is no assistance.
Julie Hirschfeld Davis for Associated Press reports that Democratic congressional leaders want to tap the $700 billion Wall Street rescue package for new loans to help the U.S. auto industry. However, President George W. Bush and GOP lawmakers instead propose diverting $25 billion in loans approved by Congress in September – originally for retrofitting their factories to make more fuel-efficient cars – to cover their urgent needs.
Catherine Rampell for The New York Times reports that the auto industry supports 1 out of every 10 jobs in the United States, according to a study. The study concludes that “new vehicle production, sales, and other jobs related to the use of automobiles are responsible for 1 out of every 10 jobs in the U.S economy.