Friday, December 26, 2008
News Headlines Get Personal II
i know my neighbor to the left is feeling a bit of relief. a father of two, he works at a car dealership nearby. judging from the cars he drives, his dealership sells American cars, which means it’s either directly or indirectly connected to GMAC. after all, GMAC funds most of the automaker’s dealers, and even if GMAC doesn’t directly fund his dealership, it’ll fund his neighbors. if GMAC goes down and pulls down a bunch of dealerships with it, firms that fund those newly-failed dealerships have a good chance of failing too. and those firms might fund my neighbor’s car dealership.
the retired couple living across the street have a son-in-law that develops products for car interiors. as a tier-2 supplier to GM, Ford, Chrysler and other automakers, most of their business depends on how well American cars are selling. i highly doubt their company’s very diversified, because he was talking about how grateful he was for GMAC’s switch. he wouldn’t be so concerned if his company was also developing products for the tech and textile industries. he’s a father of two lovely kids that i just met.
one of my friend’s uncles is the president of an engineering firm that provides products to the automakers. their company’s more diversified, having expanded into the medical industry a few years ago, but any collapse in the auto industry could significantly reduce their profits. they’d need to cut costs, which can mean layoffs. and my friend’s uncle would probably be the one telling his employees the bad news. and the thing about layoffs is that it doesn’t just affect one person. some employees support their wife/husband and kis, so laying off those employees is like laying off an entire family.