China Trade: A ‘Target Rich Environment’. Now, It’s American Auto Parts.


China Trade: A ‘Target Rich Environment’. Now, It’s American Auto Parts.

Huffington Post – The post-Crash intervention by the Obama administration in mid-2009 in righting the General Motors and Chrysler ships was an extraordinary example of ideal cooperation between industry and government.  And anyone who argues against it ignores the realities of the surrounding financial marketplace which at the time offered absolutely no luxury of time and no market-available means of restructuring these two companies so integral to the American economy.  A cascade into bankruptcy or liquidation by GM and Chrysler – with Ford following in their wake – would have led to the immediate loss of hundreds of thousand jobs, with disastrous effect throughout the nation, but especially in Michigan, Ohio and Indiana where employees directly and (with the multiplier effect) indirectly associated with motor vehicle manufacturing (autos, parts and tires) account for around 8% of total non-farm employment (of 11.9 mm).

For a decade, many of us have been calling on the White House – first, Mr. Bush’s, and now, Mr. Obama’s – to demand that the U.S. have a formal national all-of-government Manufacturing Policy to rival the Policies of our major trading partners.  If such a Policy had been in place in mid-2009, the appropriateness of and the mechanisms for restructuring the auto manufacturing industry would have been more obvious to all and the “prove-it-to-me” naysayers would not still be arguing, even today, over either the clear imperative or the now very obvious positive outcomes of the ultimate effort.

But the continuing absence of such a Policy has left stranded, so to speak, many thousands of the 1.6 million combined direct and indirect jobs in the auto industry related to parts and tire manufacturing.  The overall motor vehicle manufacturing sector is the second-largest employer among all U.S. manufacturing industries, and parts and tire manufacturing contribute the most direct jobs (two-thirds or more), of which many are now at grave risk of being offshored, especially to China.

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