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Congressman Kanjorski supported loans to American automakers

01.16.09

January 2009 Scranton/Wilkes-Barre/Hazleton edition of The Union News

Congressman Kanjorski supported loans to American automakers

By PAUL TUCKER
theunionnewsswb@aol.com

REGION, December 30th- Congressman Paul Kanjorski, Democrat 11th Legislative District, voted for HR 7321, the Auto Industry Financing and Restructuring Act on December 10th, that would have provided a “bridge loan” of 14 billion to the American automakers. The House of Representatives passed the legislation, however, the auto loan failed to pass in the Senate. Despite the failure of the legislation in the Senate, President Bush secured federal money to keep the industry alive into 2009.

Mr. Kanjorski stated voting against the “bridge loan” was not even an option for him. “The industry might well have vanished in a matter of weeks, unemployment would have skyrocketed, and the economy would have sunk deeper. Let us hope that the money is allocated wisely, that the executives act prudentlt, that all stakeholders make some sacrifices, and that long-term viability is pursued tirelessly,” said Mr. Kanjorski.

According to a study released by the Economic Policy Institute (EPI) in Washington, DC, and the Keystone Research Center in Harrisburg, the financial woes of the United States auto industry is not just a Detriot problem but could impact the economies of states across the nation.

Pennsylvania ranks ninth among the 50 states in potential job loss as a result of one or all of the big three automakers shutting down, the study estimated. Also, up to 120,100 jobs would disappear in Pennsylvania within a year, if General Motors (GM), Ford and Chrysler were allowed to fall into bankruptcy. The loss of GM, the company most at risk of entering bankruptcy, would jeopardize up to 33,200 jobs in Pennsylvania.

The Economic Policy Institute estimated even if only motor vehicles and parts jobs are counted, Pennsylvania would lose up to 8,400 jobs from a total industry shutdown and up to 2,300 from a shutdown of General Motors alone.

Mark Price, Ph.D., a labor economist for the Keystone Research Center, noted that the EPI study should concern manufacturers and other industries in Pennsylvania. “Anyone who thinks an auto industry collapse has little impact on Pennsylvania should think again. As the EPI study shows, the 120,000 Pennsylvania jobs threatened by an auto industry failure account for 2.1 percent of total state employment,” said Mr. Price.

“America needs its own automotive industry. I have always owned American cars. I believe in the American workforce, the thousands of men and women who make the automobiles on which we rely. They do not fly on corporate jets, they centainly do not make millions of dollars. We need to help them in their time of need,” said Mr. Kanjorski.

The EPI study estimates the loss of “re-spending” jobs as a result of the wages lost by workers in motor vehicle industries and other sectors supported by car production, would within three years top $150 billion in federal tax revenue and without cars to export, the United States trade deficit would rise by $109.3 billion.

Mr. Kanjorski believes the loss of the auto industry would result in a sizable drop in government revenue just when annual deficits have run away and the national debt in soaring. “Unemployment assistance will skyrocket and thousands of American breadwinners will loss their homes and even the ability to feed their children. The cost of inaction will therefore be catastrophic,” added Mr. Kanjorski.

Mr. Kanjorski said experts estimated 2.5 million jobs will be lost in the nation if the auto industry is lost. “The Big Three employ 240,000 workers, suppliers and dealerships provide 800,000 jobs, and some 1.4 million jobs are dependent on the auto manufacturers.”

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