By DEMOCRATIC GOVERNORS: Auto industry ties economy together

As governors and governors-elect, we are not just casual observers of the plight of the U.S. auto industry. In our states, we know that the industry impacts far more than big manufacturing plants and the people who work in them. We know that jobs in every state – as many as 6 million of them – are tied in some way to the auto industry. We know the fate of our budgets and those of our towns and cities is tied to what happens to our domestic automakers.

And we know – because it is so pervasive and interconnected – that allowing the industry to collapse could mean a depression for our country. We therefore urge Congress and the administration quickly approve federal bridge loans to the U.S. auto industry

Permit us to illustrate. If you picture the American auto industry and all of the industries and workers that rely upon it as colored push-pins on a U.S. map, you quickly see how it serves as an essential, interconnected thread that ties together the American economy. Start by placing one colored pin on each community that has a domestic automakers’ plant. As you would expect, there would be a lot of pins in Michigan and Ohio. But you may be surprised to see pins in places like White Marsh, Md., where General Motors builds hybrid transmissions, and Louisville, Ky., and Claycomo, Mo., where Ford builds pickup trucks.

Next, place a different colored pin on the map to designate auto parts suppliers. Believe us when we say you’ll need a lot of pins. There are nearly 12,000 parts manufacturers located in virtually every state who employ more than 800,000 workers at an annual payroll of $47 billion. That’s more than three times the number of workers employed by the automakers themselves. The collapse of one or more of the domestic automakers would cut a deep swath of bankruptcies through the supplier community in a matter of weeks, which could then spread to railroads, steel producers, trucking companies, and the list goes on.

Add 14,000 pins in another color for domestic auto dealers who bring the auto business to Main Street in communities across the nation. With a total payroll of some $35 billion annually, their economic impact is significant. On average, new car sales account for 18 percent of each state’s total retail sales. Dealers pay local property and business taxes, and their customers pay sales taxes. Their 750,000 employees pay state, local and federal taxes.

Finally, to finish the map, you’ll need pins for every service in every community that is somehow touched by the American auto industry. You’ll need pins for advertisers, rental car companies, “mom-and-pop” diners, and stores across the country where employees of dealers, suppliers, and manufacturers live, work and spend money.

If the auto companies are allowed to fail, the ripple effect would spread through every community in the form of less money for schools, law enforcement and all the other important services government provides. Experts believe this could result in 3 million Americans losing their jobs. Those displaced workers would need assistance in the form of food stamps, unemployment benefits and other government services costing $156 billion over three years.

States, in particular, cannot afford inaction at the federal level, as we are already being forced by tight budgets to make wrenching decisions: either cut the very services that people need most in tough times – health care, job training, new job creation and education – or ask citizens to pay more to provide those services when people need them. Either option would freeze any hope of an American economic recovery.

The auto industry has appealed to the federal government for bridge loans to carry it through this sharp economic downturn. The industry has listened to Congress and produced substantive plans that outline the management and product changes they need to make to restructure, repay their loans, and preserve jobs in our states and throughout the country. These plans include how the companies intend to transform their industry by developing advanced batteries to power their vehicles. The industry has already committed substantial amounts of research dollars to new technologies, and the commercialization of advanced battery and other technologies will play an enormous role in American future energy independence. For our nation’s future, for our energy security, and therefore our national security, America must keep this important industry alive.

Bold action by Congress and the administration now can give an essential American industry the boost it needs when it needs it most, and at the same time, help maintain economic stability in our country. If they fail to act, the ripple effect will wash across all our states to devastating effect. We cannot let that happen.

Michigan Gov. Jennifer M. Granholm, Ohio Gov. Ted Strickland, Wisconsin Gov. Jim Doyle, Colorado Gov. Bill Ritter, Jr., Iowa Gov. Chet Culver, Kentucky Gov. Steve Beshear, Maryland Gov. Martin O’Malley, Delaware Gov.-elect Jack A. Markell, and Missouri Gov.-elect Jeremiah W. (Jay) Nixon collaborated on this piece.