Fears of more mass job cuts from the global economic crisis grew Friday as India warned half a million could be lost in its textile industry and concerns mounted of a possible collapse of US automakers.
Stock exchanges endured another roller-coaster ride at the end of a brutal trading week, as Japan said it was ready to take action if necessary to tackle wild swings in its financial markets.
The White House assailed Congress for putting off a vote on whether to bail out the struggling auto industry, blasting Democrats for “mindless opposition.”
“It is appalling that Congress decided to leave town without addressing a problem that they themselves said needed to be addressed,” White House spokeswoman Dana Perino told reporters traveling with President George W. Bush.
“There is this mindless opposition to anything that the president or Republicans would support.”
Democrats in the US Congress put off a vote on a 25 billion dollar bailout for the “Big Three” auto manufacturers until at least December and ordered them to come up with a new restructuring plan.
Senate Majority leader Harry Reid said it was a “sad reality” that despite a bipartisan deal by senators from states which have millions of jobs depending on the industry, there was not yet sufficient support for a bailout.
Yves Smith, analyst with the financial website Naked Capitalism, said a collapse of General Motors would be “a disaster of colossal proportions.”
“GM would be a massive bankruptcy. It is doubtful whether it could obtain enough (debtor) financing, which means it might be forced into a partial, perhaps a full liquidation. The ramifications are nightmarish.”
Indian Commerce Secretary GK Pillai told reporters in New Delhi that the textile industry, the country's second-largest foreign exchange earner, will lose half a million jobs by April 2009 due to the financial crisis.
The sector is estimated to employ around 38 million workers and accounts for about eight percent of the gross domestic product of Asia's third-largest economy.
Meanwhile, a Russian property developer suspended construction of a Moscow skyscraper that was planned to be Europe's tallest building, Interfax news agency reported.
Billionaire developer Shalva Chigirinsky was quoted as saying the crisis had forced him to freeze work on the Russia Tower, which is to be 612 meters (2,008 feet) tall when completed.
Other governments were working to protect industries, as the head of Ford Germany said the European Union should make around 40 billion euros (50 billion dollars) in loans available to the continent's ailing auto sector.
Bernhard Mattes told Bild daily that such assistance would not be state aid but was “in order to allow all European carmakers the possibility to meet EU requirements on fuel efficiency and emissions etc more quickly.”
The car industry's woes were highlighted again when Toyota Motor Corporation announced plans to cut 3,000 temporary jobs at its domestic plants in Japan in response to worsening sales.
“It's one car crash after another,” said GFT derivatives head Martin Slaney in Australia.
“The risk of global economic recession is deepening by the day. The prospect of The Great Depression Two is a genuine one and is plain scaring investors.”
Singapore announced a 1.5-billion US dollar package to help its businesses gain access to credit amid a recession in the city-state.
Hypo Real Estate, Germany's biggest financial crisis casualty to date, said it has been given more help from Berlin with 20 billion euros (25 billion dollars) in loan guarantees.
European stock markets fell sharply, with London losing 2.28 percent, Frankfurt 2.47 percent and Paris 2.26 percent.
US shares swung higher at the opening, staging a modest rebound after two days of vicious selling that pushed the main indexes to multi-year lows.
In afternoon trade, the Dow Jones Industrial Average was up 0.82 percent after closing Thursday at a five-and-a-half-year low.
Asian stocks had spent much of the day down but staged a late turnaround. Tokyo ended 2.7 percent higher, Hong Kong closed 2.9 percent up and Sydney gained 1.9 percent.
