Auto industry braced for U.S. default

[DainBramaged]

A government default on its debt would derail a shaky economic recovery, crimp auto sales and stifle automakers and suppliers, auto industry executives and analysts say.

But most think the catastrophe will be avoided, even though President Obama and House Speaker John Boehner remain deadlocked on a plan to cut the federal budget deficit and raise the nation's $14.3 trillion debt ceiling.

And if they don't' reach a solution?

"The psychological impact will be huge," said David Cosper, CFO of Sonic Automotive Inc., the nation's third-largest dealership group.

Interest rates would soar and lending would be squeezed. Consumer confidence would fizzle, and the dollar would weaken as investors scurried for safer currencies.



Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20110727/OEM/110729868/1422#ixzz1TKu4KyvO

[LiberalEsto]

1. Maybe they can bail the U.S. out

Turn about is fair play.