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Local Car Dealers Anxious as Congress Weighs Bailing Out "Big Three"

Executives of the top three U.S. automakers went back to Congress Thursday to seek a financial bailout from the federal government, this time asking for a combined $34 billion. KSMU’s Jamie Givens reports on how Congress’s decision could affect local car dealers, as well as the general economy. While chief executives from Ford, GM and Chrysler are begging the federal government for billions of dollars in aide, local dealers can only sit and wait to see how their businesses will be affected.Lynn Thompson is co-owner of Thompson Sales Company in Springfield, a General Motors dealer.“I’ve heard different stories that if they don’t get the money that, in different bankruptcies, that there could be job losses of huge proportions,” said Thompson.Thompson says that all of the Springfield dealerships, collectively, employ over 1,100 people in this area with a combined payroll of more than $50 million.He says that if the so-called “Big Three” are not granted help from the government, the effects could be far-reaching.“If GM goes bankrupt, the supply chain supposedly will be affected. And suppliers will go bankrupt, and those suppliers are the same ones who provide parts for the cars that are built by all the manufacturers,” said Thompson.Dr. Ardeshir Dalal is the head of the Economics department at Missouri State University. He says that he is in favor of a government bailout of the struggling automakers.“So, if they weren’t bailed out, there would be a loss of jobs, a loss of wages. But, that’s sort of stating it very mildly because the magnitude of the problem is huge. You know, these three manufacturers account for a very substantial fraction of the U.S. economy,” said Dalal.He says that in more stable economic times, a bailout might not be so necessary. But due to the current recession, he says ignoring a bailout would result in extra costs for the government.“There would still, of necessity, be increased government expenditures because you would have increased unemployment compensation, which would have to be paid. And this would be coupled with a decrease in tax revenues because you would, of course, have income losses from all the workers who were laid off,” said Dalal.Dalal says that even though the “Big Three” have mostly created their own problems, it is important in this situation to do what’s best for the economy, which he says is done by simply weighing costs and benefits.A poll conducted earlier this week showed that 60 percent of Americans were against the government bailing out the automakers.For KSMU News, I’m Jamie Givens.