LIANE HANSEN, host:
From NPR News, this is Weekend Edition. I'm Liane Hansen. In the past two months, more than a million jobs across the United States have disappeared. The Big Three automakers are in critical financial condition, which means millions more are on the brink. Gary Burtless is a senior fellow in economic studies at the Brookings Institution. And he's joining us by phone. Good morning.
Dr. GARY BURTLESS (Senior Fellow, Economic Studies, Brookings Institution): Good morning.
HANSEN: If Ford, Chrysler, or GM were to fail, what's your estimate about how many jobs would be directly affected?
Dr. BURTLESS: I think that almost a million will be - the Big Three themselves employ a little less than a quarter of a million workers. And the people who work in parts, supplies, factories, and the folks who work in the dealerships that sell these brands, in total, employ another million or so workers.
HANSEN: And it seems as though it will be different layers in the company?
Dr. BURTLESS: If the companies completely disappear, of course there's no refuge for any of the employees at the Big Three. For the dealerships, some of those employees can save their jobs by working to repair all the old cars that are out there. Lots of repairs get done. But for the people selling new vehicles, of course there's nothing more to be done. There are no new vehicles coming off the assembly line to sell.
HANSEN: Congress seems pretty determined to work out a deal. What do you expect the labor provisions of that deal will be?
Dr. BURTLESS: Well, any rational credit agreement with one of the Big Three will have to insist that they find cost savings to make the companies profitable in the long run. That's going to mean cuts in wages and fringe benefits for the workers who remain on the payroll, but probably also the elimination of some of the name brands, some of the plants, and agreements with their current creditors that will relieve the Big Three of some of their debt obligations.
HANSEN: With a bailout, what do you think is the best use to save jobs?
Dr. BURTLESS: Well at the moment, I think the grave condition of the overall economy, the fact that we've lost 1.2 million jobs in the last three months means that consumer confidence and investor confidence is already very low, and my fear would be that the disappearance of one or more of the Big Three would be a really body blow to whatever confidence remains. I think a lot people will begin to question whether the government has any sensible plan to get us out of this terrible mess.
HANSEN: And the goal, though, should be maybe get the companies to profitability in the long run?
Dr. BURTLESS: Well, in the short run, I think we want to keep the companies in being. Bankruptcy may be mean that they are completely liquidated. It's hard to see any private creditors who would step forward to give loans to a bankrupt General Motors.
And so, for that reason, some of kind of a federal credit guarantee is going to be needed if we're going to keep these companies in being. And that, I think, would reduce the pain of what are going to be some painful cutbacks in the companies, even if the companies survive.
HANSEN: Gary Burtless is a senior fellow in economic studies at the Brookings Institution. Thanks for your time this morning.
Dr. BURTLESS: Thank you.
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