Just read this on Bloomberg:
http://www.bloomberg.com/apps/news?p...t8&refer=japan
GM Collapse Would Have `Huge' Global Impact, Nakagawa Says
By Keiko Ujikane and Keiichi Yamamura
Nov. 18 (Bloomberg) -- Japanese Finance Minister
Shoichi Nakagawa indicated that his government wouldn't protest any U.S. decision to prop up
General Motors Corp. because a collapse of the automaker would hurt the rest of the world.
``The auto industry is a hugely important employer and there are so many related industries,'' Nakagawa said in an interview with Bloomberg Television in Tokyo today. ``The effects would not simply be the collapse of a single company. The effects would be huge -- not just for America, but for Europe and Japan as well.''
GM, Ford Motor Co. and Chrysler LLC are seeking government aid as industrywide sales have plummeted to a 17-year low. Failure of a U.S. carmaker would risk the collapse of parts makers that also supply
Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., disrupting production at the Japanese automakers' North American factories.
``Japan would support a bailout'' of U.S. automakers, said
Junko Nishioka, an economist at RBS Securities Japan Ltd. in Tokyo. ``The government isn't concerned about the direct impact of the bankruptcies so much as how the failures might trigger a deeper financial crisis around the world.''
GM this month said it lost $4.2 billion in the third quarter and almost $73 billion since the end of 2004, and that it may not have enough cash to get through the year. Toyota is set to eclipse GM as the world's
biggest automaker by the end of the year.
``I believe the U.S. government will adopt policies and take action to prevent a hard landing with responsibility,'' Nakagawa said. ``If the worst-case scenario does materialize, not just Japan but the whole world will feel the effects.''
A GM collapse would cost the U.S. government as much as $200 billion in aid to affected states, unemployment benefits and costs of reviving the economy, according to an estimate prepared last week by
Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts.
Job losses would total 2.5 million from an automaker failure in 2009, including 1.4 million people in industries not directly tied to manufacturing, according to a Nov. 4 study by the Center for Automotive Research in Ann Arbor, Michigan.