Survival plan 'may deepen slump'

US automakers' pledges for more payroll cuts to win federal aid may deepen the recession after they eliminated more than 100,000 jobs in the past 3 years.

While the loans may spare General Motors Corp, Ford Motor Co and Chrysler LLC from collapse, shrinking their workforces would sap an already weak economy, said Paul Ballew, chief of consumer insight and analytics for Nationwide Mutual Insurance Co in Columbus, Ohio, and an adviser to the Federal Reserve.

"The degree of restructuring is much broader and much deeper than people assume," said Ballew, a former GM sales analyst. The industry has endured "a tough slog for the past few decades, and this is the next phase of restructuring that is probably going to be more severe."