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U.S. auto industry downturn hurts SoCal

November 18, 2008 12:00:00 AM PST
Detroit's big three automakers went to Capitol Hill Tuesday and pleaded with Congress for a $25-billion bailout they say they desperately need. Executives from General Motors, Ford and Chrysler warned the Senate Banking Committee of a national economic catastrophe should they collapse. The automakers said millions of layoffs would follow their demise, as damaging effects rippled across an already-faltering economy. There are consequences for the auto industry in the Southland should the big three fail.Normally, you'd see guys running around Kay's Automotive pulling parts. But you don't see anybody here. Mark Finkelstein says that's because business has dropped dramatically at Kay's. He's seen a lot in his 30 years in the automotive industry, but he's never seen it this bad.

"I'm scared, totally scared. I have a family, I have kids," said Finkelstein.

Finkelstein manages Kay's Automotive, an auto-parts distributor in the San Fernando Valley. Here you can find just about any part for any car. The company supplies dealerships and repair shops. But if any of the big three automakers goes bankrupt, parts manufacturers and suppliers like Kay's could also go out of business. Kay's employs about two dozen people.

"I'm worried if we have to close the store because that would take those guys out of work. What are they going to do?" asked Finkelstein.

We've already seen a number of car dealerships disappear. On Monday, Inland Valley Buick in San Bernardino shut down. Employees Tuesday were taking inventory of vehicles on the lot. A GM bankruptcy would ripple through the economy. The company has contracts with 2,000 suppliers and 4,500 manufacturing facilities. All those businesses could be forced to lay off people or close all together.

"I'm worried about my job, 'cause General Motors, if it goes down or goes under, we'll have nothing to do around here," said Kay's employee Vincent Kawesa.

"I don't think it will go under. I'm hoping that they do help out. General Motor has to actually restructure themselves," said Finkelstein.

With or without a government bailout, experts say the big three simply need to sell more cars. But in this economy it's not happening. Hundreds of dealerships across the country like this one and business associated with the car industry will continue to close down.


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