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Big 3 Bonuses to Boost Michigan Economy by $2 Billion - Comerica Study

29 February 1999

Big 3 Bonuses to Boost Michigan Economy by $2 Billion - Comerica Study

    DETROIT, Feb. 26 -- Profit-sharing payouts this year from the
Big Three automakers will represent a combined $1.94 billion spending boost
for Michigan's economy through 1999, according to an analysis by economists at
Detroit-based Comerica Bank.
    "With 260,000 auto employees here in Michigan eligible to receive bonuses,
the original payout will total $0.9 billion, an increase of 31.2 percent from
1998's payout," said David L. Littmann, chief economist at Comerica.
    "Given the ripple effects of multiple spending from each dollar received,
and after removing taxes and other leaks from the calculation, the cumulative
spending in Michigan resulting from these bonus payments will amount to an
estimated $1.94 billion -- or nearly 0.7 percent of the gross state product,"
Littmann said.  "These ripple effects will support retailing and spending on
services to a greater degree in 1999 than most analysts have previously
expected.  Derivative bonuses paid in auto supply and ancillary industries are
not included in this analysis, but will also add to Michigan's business
activity in the coming months," Littmann noted.
    Comerica Bank is the lead subsidiary of Comerica Incorporated ,
a multi-state financial services provider headquartered in Detroit, with
banking subsidiaries in Michigan, California and Texas, banking operations in
Florida, and businesses in seven other states.  Comerica also operates banking
subsidiaries in Canada and Mexico. Comerica is celebrating its 150th
anniversary in 1999.