Charleston West Virginia Economic Development

Discussions on Economic and Community Development in West Virginia and the Charleston MSA as well as issues of the Charleston Regional Chamber of Commerce.

Saturday, December 13, 2008

Charleston Chamber Confers with Michigan Chambers
About Auto Industry Crisis

Staff of the Charleston Regional Chamber of Commerce today participated in a conference call with the presidents of the Michigan State Chamber of Commerce, the Detroit Chamber of Commerce and representatives of General Motors to discuss the automotive industry’s economic struggles.

“The auto industry is a major component of the regional economy,” said Matthew Ballard, President of the Charleston Area Alliance. “We’re staying very engaged with developments at both the national and local level. It may not be widely understood that what could happen in Michigan is going to impact our state immediately. Just because we don’t have a Ford or GM plant doesn’t mean this won’t affect West Virginia families.”

Kanawha County has eight automotive suppliers that employ approximately 443 people, while Putnam County has eight suppliers employing 1,400. Together, those suppliers account for 1,843 jobs. “If one of the major automotive manufacturers goes out of business, then suppliers lose business. It will create a devastating domino effect,” said Ballard.

The Charleston Regional Chamber of Commerce’s membership also includes auto dealerships, truck dealerships and tire stores. Thousands of area families are impacted by the challenges facing the automotive industry.

“We’re not known for crying wolf, so if we weigh in on a national issue like this, it is serious,” Ballard said.

Representatives from Ford, GM and Chrysler have requested a bridge loan from Congress that would help them survive until an upswing in the U.S. economy and eventual profitability. According to representatives from the Michigan and Detroit chambers and General Motors participating in today’s conference call, the Big Three and organized labor have taken steps to “right the ship,” including participating in good-faith labor negotiations, building more hybrid vehicles and improving fuel efficiency.

Bankruptcy, they said, is not a viable option for the automobile manufacturing industry. It doesn’t resolve the biggest reason for the crisis, which is lack of credit. Even if the companies are reorganized through bankruptcy, the credit crunch still may bar many consumers from obtaining financing for the purchase of a new car. And with major competitors producing vehicles, vehicles produced from auto makers that have declared bankruptcy will not be attractive to consumers.

“We applaud Senators Rockefeller and Byrd for voting to bring the House emergency auto loan proposal to the Senate floor” Ballard said. “We urge President Bush and lawmakers to continue to consider all reasonable measures to prevent the collapse of the U.S. auto industry. This dilemma is too far-reaching to ignore.”

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