Remember when all said those GM bail outs were not worth it? Remember when we said give them the money? Well, finally we're seeing some payback, which one sure cannot say about the Bank bail outs.

I just has a truly frightening experience. During a conversation about the auto industry one of my colleagues who researches the auto industry told me that according to his calculations, the GM shutdown is going to send 250,000 off the job in Ohio.

This includes only the multiplier effect at auto suppliers, not any macro economic effect. For example, job losses at retail stores resulting from drops in spending are not included, nor are any further drops from other problems.

As it stands now Ohio unemployment stands at 9.7%.

Overall, the Ohio labor force stands at 5.95 million.

Currently, 578,000 are out of work, up from 409,000 in October of 2008.

Adding another 250,000 to those out of work, bumps the total number of unemployed to 838,000.

Divide this number by the labor force, and you get an unemployment rate of 13.9%, a 44% increase over the present rate.

This is bad folks. Bloomberg:

General Motors Corp. said it needs as much as $16.6 billion in new U.S. loans, more than doubling the aid to date, and must get some of the cash next month to survive. GM plans 47,000 more job cuts worldwide this year.

Chrysler LLC, propped up like GM with federal assistance, said it’s seeking $5 billion more from the government and will shed 3,000 more positions.

GM says 47,000 jobs will be lost world wide. GM is selling Hummer, shutting down Saturn, bankrupting Saab (which Sweden is going to salvage and return to it's nation), and shutting down 5 additional U.S. plants. It is completely not stated which countries and plants will lose which jobs. It looks bad that most of the losses will be against U.S. workers and other nations where they pay living wages.

It's a Christmas "Miracle", George Bush came through. $13.4 billion for the auto industry. Or maybe, not so fast. This is a stay of execution, not a pardon.

The troubled U.S. auto industry will receive emergency loans of $13.4 billion from the federal government in return for an extensive restructuring of its outstanding debt and labor costs over the coming year, according to administration officials.....

Funds for the loans will come from the Troubled Asset Relief Program initially set up to aid the financial industry. An additional four billion will be available in February.

But the money will come with some extensive strings attached. Though the White House will not appoint a "car czar" to oversee the industry going forward, the companies will have to restructure their wage agreements so that they are competitive with foreign automakers by the end of next year. In addition, by March 31 of this year the companies will have to show they are financially viable and able to repay the government -- a requirement that may, for example, force them to renegotiate outstanding debt and other agreements.

Be afraid, be very afraid. Although this money is going to push the industry through till March, a whole new set of challenges await the President-elect come March. First, let's set lay down a few facts to start the discussion.

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