Question

Why does President George W. Bush state that he cannot allow the auto industry to collapse?

Companies should never be allowed to collapse.

The collapse of a major industry would make the recession worse.

Allowing the car industry to collapse would slow consumer spending.
“In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action … My economic advisers believe that such a collapse would deal an unacceptably painful blow to hardworking Americans far beyond the auto industry. It would worsen a weak job market and exacerbate the financial crisis … It could send our suffering economy into a deeper and longer recession.”

–President George W. Bush
2008

Answer 1

"The collapse of a major industry would make the recession worse."

He says a collapse would "worsen a weak job market," "exacerbate the financial crisis," and "send our suffering economy into a deeper and longer recession," so his reason is to avoid deepening the recession.