How a Metro Nation Would Feel the Loss of the Detroit Three Automakers

Howard Wial
Howard Wial Former Brookings Expert

December 12, 2008


The federal government has agreed to provide $17.4 billion dollars in emergency loans to keep General Motors and Chrysler in business for the next few months. By the end of March, the companies will have to show that they are financially viable; if they cannot do so then they will be required to repay the loans immediately, a step that would likely result in bankruptcy. Although the loans provide a respite for the companies to work out the details of restructuring with their creditors, suppliers, unions, and dealers, their ultimate economic impact is unclear. GM and Chrysler may close plants and lay off workers permanently, either as part of their immediate restructuring or as part of an eventual bankruptcy.

One consideration in assessing the economic impact of any job losses that may result from restructuring is the extent to which the regional economies of 50 metropolitan areas—including most of the metropolitan economies of the Great Lakes region as well as some in other regions of the country—depend on the jobs and incomes generated by General Motors, Ford, Chrysler, and their suppliers.