How will GM's bankruptcy affect economy?

— -- Back in the days of Cadillac tail fins, the wisdom was: "What's good for GM is good for the country." Now that GM has declared bankruptcy, some people are asking: Is what's bad for GM bad for the country?

"I think the saying is truer today than many people realize. GM is a good metaphor for the economy — both are large and complex and awfully hard to fix. It's going to be painful," said Mark Vitner, senior economist at Wachovia Corp. in Charlotte.

Economists agreed Monday that the bankruptcy filing of the once-mighty General Motors Corp. will be a blow to the American economy. The filing comes at the same time the economy was starting to show glimmers of hope with the rate of economic decline slowing and consumer confidence rebounding, economists said.

Although the Obama administration managed to hold off the bankruptcy for several months until the economy was in a better position to absorb it, the nation is still in a recession, Vitner said. What's more, the auto industry won't be the white knight it was during previous recessions when it led the nation to recovery, including during the most recent recession in 2001, Vitner said.

"It's a real hurdle for the economy on the way to recovery," Vitner said. "The message for America is: There are no easy solutions," Vitner said.

Delaware is certain to feel the economic sting of the loss of GM's Boxwood Road assembly plant, which the state said was a $182 million economic engine here. Although economists said Delaware will experience less anguish than communities located in Michigan, Ohio and Indiana, the state's auto manufacturing sector has evaporated in less than a year. The loss of both Boxwood Road and Chrysler's Newark assembly plant, which closed in December, could be a drag on the state's economy for as long as two years, economists said.

"It's not going to help" the recovery, said George Sharpley, labor market economist with the Delaware Department of Labor. "Those jobs are not easy to replace."