Impact of auto maker bankruptcy on Homeland Security

If you’re wondering how an auto industry bailout – or lack thereof – might affect homeland security, you’re not alone.  I’m also trying to find some good answers.

I’ve seen many articles and an exponentially increasing number of blog posts on the Big 3 bailout plan and the arguments for and against letting them go bankrupt.  But other than a few very short mentions (mostly in comments to some of the articles), I haven’t seen any attempt at an analysis of how a complete failure of one or more of the Big 3 would affect national security/homeland security; anecdotal references to the role auto makers played during World War II are the closest I’ve seen yet (see item #6 in this blog post for the longest discussion of this that I’ve found so far).

There seems to be a consensus (which I haven’t been able to trace back to any real analysis) that it would have some impact on national security for there to be no major auto manufacturing in the U.S., because if there were a real conventional war, we wouldn’t have the manufacturing capacity and expertise needed to produce the military vehicles needed to support the war.  The need to maintain conventional warfare manufacturing capabilities has been highlighted by Russia’s recent war with Georgia in South Ossetia.

However, I haven’t seen anything even mentioning other more direct potential effects of the failure of the U.S. auto industry.  For example, does the auto industry share any suppliers in common with the defense and homeland security industries (it seems likely there’s at least some overlap), and if so, how would failure of one or more of the Big 3 affect those suppliers – and the defense and homeland security companies that rely on them?

If you see anything about this (preferably with some hard data rather than just opinion – but opinion is better than nothing), please post the link or some other pointer in a comment.  This is an area where politics could have some significant unintended consequences for defense and homeland security companies, and trickle down to the rest of us in unexpected ways.  I’d like to help everyone follow it.



Impact of the bailout bill

Although it’s not directly related to homeland security, and it doesn’t change the FY2009 homeland security budget, the Economic Stabilization Plan (otherwise known as the “bailout bill”) is expected to have an effect on homeland security funding at multiple levels (see this commentary for more on the expected impacts).

[Update 10/08: Credit squeeze has yet to hit the homeland security biz]

[Update 10/09: See Homeland Security and Economic Recovery for how smart Homeland Security spending can help with economic recovery]

There’s more than enough commentary and information on the bailout plan on the web, but there’s so much it’s hard to piece it together and find really good info.  Thankfully, I found a good summary of information resources on the blog of California Rep. Mike Honda (D-CA 15):

See also this article by Steven Pearlstein of the Washington Post about why even people who hate the bailout think it’s necessary.