International Metalworkers’ Federation chief suggests as many as 6 million unionized autoworkers worldwide will lose their jobs in the current crisis:

By Niklas Magnusson

May 25 (Bloomberg) —  “Worldwide, maybe we will lose something between 20 to 25 percent of our membership,” Malentacchi said in an interview at the IMF World Congress in Gothenburg, Sweden, today. 

While carmakers have so far mainly laid off temporary workers, “we actually now see permanent workers being hit by the crisis and we see how quickly these people will be affected,” he said.

The economic slowdown and consumers’ concerns have caused a 16 percent drop in European automobile sales. Carmakers are responding by slashing manufacturing capacity and jobs as they seek to survive the worst crisis since the 1930s.

Regardless of how the Obama Administration ‘reorganizes’ the US auto industry, it will be much smaller; liquidated or merged out of existence. The outcome will be fewer customers for other goods including automobiles by whatever maker. The cycle of deflation will continue and become amplified.

By Peter Robison

May 22 (Bloomberg) — 
The biggest Wall Street crisis since the Great Depression isn’t just a setback for New York or bankers. The finance industry’s contraction may wipe out $185 billion in wages and profits, or $600 for every man, woman and child in the U.S., according to Thomas Philippon, a finance professor at New York University’s Stern School of Business. The trail of reduced income affects car mechanics, waiters, sports teams, hair stylists, jewelers, house cleaners and watch repair shops. 

Largest Absolute Drop 

“We’re seeing lots of lives derailed,” said Simon Johnson, professor of entrepreneurship at the Massachusetts Institute of Technology.

Unsurprisingly, the trickle- down effect from shrinkages effecting those downstream. Unlike the periods of panic, the impression is given of a certain reassuring normalcy. This is deceiving. The damage done by this ‘reverse growth’ is equal to that done by episodic credit freeze- ups and more enduring. Amplifying this is the additional costs for petroleum- based energy across the spectrum of economic activity that relies on it – which is everything.

The squeeze is on! More profits will be lost and more jobs … and more industries.