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Foundry Daily News

08. December 2008

USA - Troubles in Detroit hit home

As talk of a bailout for GM, Ford and Chrysler grows louder by the day, the ripples of the choppy waters in Detroit are being felt in Southwest Virginia.

The automakers, collectively known as "the big three" are struggling to stay afloat. Executives have been twice now to Capitol Hill - asking Congress for loans to help their companies survive.

Political leaders have been deadlocked on what to do, if anything, to fix Detroit's woes. Financial Analyst Art Hogan told it's pretty complicated.

"There is no easy answer for what to do in Detroit."

There are nearly 50,000 jobs in the Commonwealth tied to the auto industry.

If one of the big three automakers is allowed to fail, they warn, it could have a major impact on the local economy.

While car dealers may be holding out, other industries tied to the automakers are already floundering.

Four different companies in our area tied to the auto industry have closed or laid off workers in the last three weeks.

Acument Global Technologies in Wytheville makes fasteners for automotive uses. They are laying of 162 workers.

In Blacksburg, 50 employees are losing their jobs at Wolverine Advanced Materials - a company that makes gaskets for automotive uses.

Intermet is also cutting back. The New River Foundry will cut 140 jobs in January. Intermet makes castings for car bodies.

And Goodyear's rubber mix plant in Radford permanently laid off 33 workers in November.

That's a lot of jobs already and one reason Congress and the White House are working quickly toward an agreement.

The alternative, Hogan says, is just too bad to consider.

"The alternative is much much worse. Allowing any one of the automakers to go into bankruptcy starts a self fulfilling prophecy where the entire industry goes into liquidation. When that happens you're talking millions of jobs, not hundreds of thousands of jobs," said Hogan on CBS' the Early Show.

That may translate into more troubling news for Southwest Virginia.

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