Previously it was reported that the breaking point for General Motors would come if vehicle sales fell significantly below 14 million, and the news is even worse for Chrysler. Michael Robinette, vice-president of forecast services with CSM Worldwide has told Automotive News that Chrysler will likely be sold off in chunks throughout 2009 and 2010, and that a car czar appointed by the President should supervise a "controlled wind-down" of the carmaker to minimize any shocks to the industry.
Jim Gillette, another senior employee of CSM, is predicting that the flow-on effects of losing Chrysler could be devastating to other areas of industry. Gillette predicts that Chrysler's possible bankruptcy could affect over 100,000 employees and push around 25% of auto suppliers to file for bankruptcy or reorganization due to bankruptcy.
Meanwhile, the market share of the Detroit 3 is expected to continue dropping to around 43% next year. This year the Detroit 3 barely managed to control more than 47% of the North American market and represents a strange period for the industry, which is used to having a majority market share in its domestic operations.
While a federal bailout bill may be enough to keep Chrysler and GM from folding, the draft bill we saw earlier is anything but concrete in its status. The House of Representatives still must vote on the bill, and then it must pass through a difficult Senate vote.