March 6, 2009 at 1:00 am

Ron Gettelfinger: Labor Voices

Gettelfinger: Auto loans help keep U.S. jobs

American cars still matter, creating more employment than competitors

Last week's financial results and this week's sales figures show that the U.S. auto industry still faces serious financial challenges.

As the Obama administration considers whether to provide additional loans to GM and Chrysler, the UAW asked Level Field Institute, a research firm based in Washington, to answer two questions:

  • Do auto jobs matter to the U.S. economy anymore?

  • If so, do some companies matter more than others?

    Automakers support about 3 million U.S. jobs, but the bulk of those jobs come from Chrysler, Ford, and GM. GM employs nearly as many workers as all the foreign automakers combined. Ford and Chrysler each employ more Americans at a single one of their plants than Volkswagen, BMW, Subaru, Mercedes, Hyundai and Kia each employ nationwide.

    Critics argue that Detroit supports more jobs because we are "bloated," but today's auto industry is a highly productive, global industry, with both U.S. and foreign manufacturers operating at a high level of efficiency: GM's worldwide operations, for example, produce about as many cars per worker as Toyota.

    Chrysler, Ford and GM support more U.S. jobs because they conduct more of their work here. For example, buying a Ford supports seven times more U.S. jobs than buying a Volkswagen. Does this mean VW is seven times more efficient? No. Ford makes more cars per worker than Volkswagen.

    Ford supports more U.S. jobs because 85 out of every 100 cars it sells here are made here. VW produces no cars here. More than 3 out of 10 Ford workers are based in the United States, while fewer than 1 in 100 Volkswagen workers are based here.

    More than eight out of 10 of the vehicles Chrysler, Ford and GM sold here last year were made here, compared to only half the vehicles sold here by foreign-based manufacturers.

    To match Detroit, foreign automakers would have had to make another 2.5 million cars and trucks here last year. At a projected output of 300,000 units per factory, producing those 2.5 million vehicles would have required them to build eight or nine new assembly plants here in the U.S. last year.

    Because they make more cars here, Chrysler, Ford and GM buy more U.S. parts, too. In fact, Ford, GM and Chrysler use more than twice as much domestic content per car as foreign automakers.

    What would happen if Ford, GM and Chrysler had matched Honda, Toyota, Nissan and others by outsourcing more of their auto parts purchases last year? U.S. parts companies would have lost another $49 billion in sales -- and as many as 1 million jobs would have moved overseas.

    The country that manages to keep these auto jobs will also benefit from hundreds of billions of dollars in future research and development. Ford, GM and Chrysler together spend about $17.5 billion per year on research and development, and 80 cents of each dollar is spent in the United States.

    In fact, Ford and GM each invest nearly as much in research and development each year as NASA -- and nine times more than ExxonMobile. That's a big reason why Michigan ranks second among the 50 states in corporate R&D.

    Today's patents will have a big impact on where tomorrow's jobs go.

    But this research and development is also making a difference today. Our roads are four times safer than they were in the 1960s; emissions are 99 percent cleaner than in 1980; and it takes about eight fewer hours to assemble a car than it did in 1995 (a 20 percent improvement).

    Whether the measure is direct U.S. jobs, jobs at auto parts companies, spin-off employment or research and development spending, U.S.-based auto companies make a huge contribution to our economy and our communities.

    These are the kinds of facts policymakers and the American public should keep in mind as we work to find solutions for the crisis facing U.S. automakers and U.S. manufacturing.

    Ron Gettelfinger is president of the United Auto Workers. Fax comments to (313) 496-5253 or e-mail to letters@detnews.com">letters@detnews.com.