I read the EPI paper. It appears to be mostly a panic piece for saving the industry, rather than a research article.
EPI does not provide any evidence that 3.3 million jobs will be in fact be lost if one or more Detroit firms files for Chap. 11., as you quoted. They arrive at the 3.3m figure merely by counting up jobs as follows:
-all direct jobs from the big 3
-all indirect jobs (suppliers) to the big 3
-all non-domestic auto makers! Yes, they're including Toyota-US, etc.
-a very large multiplier in the economy at large, that is lost jobs from reduced income by auto related people. This last multiplier is far greater than all the above auto related jobs.
They call this a 'total industry shutdown', which would cost 3.3m jobs. They even include, a stoppage of imports from other countries in that figure! [See foot note 3 where they call it a far fetched idea]. Their words:
It is the wildest hand waving to suggest this would actually happen. They have to show where Chapter 11 would actual force the companies to cease operations, vs go into conservator-ship. They provide no evidence of this major issue at all, but cite a
New Yorker piece. BTW,
http://www.ft.com/cms/s/0/1a2e2042-c79f-11dd-b611-000077b07658.html?nclick_check=1", among others, says they will not shut down if they enter Chap. 11.
The figure they cite for a GM only shutdown is 53,200 direct jobs. This much is well sourced by the labor bureau, and is credible, IF GM shuts down. Then the list 284,000 indirect jobs for GM in immediately connected business (suppliers). Yes it is credible that this many people are involved in supplying GM; it is
not credible that 100% of this figure will lose their jobs IF GM shuts down. Their 'respending' figure for GM, the ripple through the economy, is 576,700. Well perhaps, but every job lost in every industry has a ripple effect, but this does not justify the government picking winners.
The EPI assertion that the foreign-owned domestic manufacturers will also shutdown, without evidence, is ridiculous.