The Cascading Effects of the Collapse of American

the cascading effects of the collapse of american automakers report cover

The Cascading Effects of the Collapse of American Automakers: Implications for Healthcare and Nonprofits

The collapse of one or more of the “Big Three” American automobile manufacturers – General Motors, Ford, and Chrysler – will hurt virtually every area of the reeling U.S. economy, including the healthcare system and the nonprofit sector. Most arguments over the possibility of government intervention focus exclusively on the obvious stakeholders: employees and shareholders of the Big Three, employees and shareholders of U.S. automotive parts suppliers, and taxpayers. These parties bear what we will call “primary” economic costs, since they will feel the direct effects of such a contraction. A complete analysis of the issue, however, also should consider such “secondary” economic costs as the consequences for healthcare and nonprofits. This brief attempts to assess both types of costs and provides policy recommendations based on the assessments.

We will proceed by looking first at the primary costs, since they represent the large and direct economic effects that ultimately produce the secondary costs. Based on assessments of the primary costs, we will examine the secondary costs that interest us: the impact on healthcare and nonprofits. Finally, we will use both assessments to make recommendations to policymakers and will conclude with some closing thoughts.

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