We’ve been ringing this bell for a while now, so it’s nice to see some of the big guns in the media world back us up. The New York Times has a scathing piece on the oft-cited Center for Automotive Research study on auto industry employment today, stripping the statistics of much of their bailout-justifying clout. The Times points to two significant shortcomings in the study, the first of which is that the statistics presented by CAR account for the entire industry, including those firms which build cars here but aren’t going under. As we have argued before, these statistics prove only how vital the entire auto industry is. For Detroit to claim that these numbers are somehow indicative of the amount of jobs which will be lost if the American automakers go under is beyond misleading. In fact, if the Detroit Three fessed up to the fact that the “foreign” transplants employ more Americans than they do, you would have a good sense of how “viable and relevant” they really are.
Beyond this, the Times points out that CAR’s data is outdated, having been collected between 1998 and 2001. Many, many auto industry jobs have been lost since then, mostly from the ranks of the once-big three. In fact, as AllBusiness reports, 133k jobs were lost in 2001 alone, and since then, 70k+ annual layoffs have been the norm in this industry. And though the Times decries CAR’s ties to labor, industry and government, they cite a more recent report from the center which extrapolates that half of all jobs lost in the event of a “major contraction involving one or more of the Detroit Three automakers” would be recovered by 2011. Funny how GM and Chrysler aren’t exactly pimping that finding around Capitol (capital?) Hill.
Detroiters deliberately spreading misinformation in the hopes of lining their own pockets?! Say it is’nt so!
Car washes are included in the auto industry numbers to get 1 in 10? Lies, damned lies, and statistics.
Of course, the more optimistic estimate of losing 2.5-3 million jobs isn’t exactly heartwarming.
Between corporate jets and faulty data, this whole push for a bailout has turned into a PR fiasco for GM, Ford and Chrysler.
major contraction … would be recovered by 2011
I’m not sure about that. I wouldn’t be surprised if a lower level of yearly car sales becomes the norm for this country because:
* Modern vehicles are quite durable (no more of those cars that rust through in 5 to 10 years).
* Demographics are shifting towards retired people, who don’t drive as much.
* Shift away from a consumer culture of debt-financed spending.
* Reduced roll of car dealers due to internet.
Add that up and I wouldn’t be surprised if we see a permanent shift from 16 million units in 2007 to more like 12 million annually going forward, even if the country pulls out of its current financial woes. That permanent demand decline would be yet another reason why GM should reorganize under C11–they need to match the market reality that consumers are just not going to buy as much stuff.
SunnyvaleCA :
You may very well be right in that the run up to 17 million units was fueled on easy credit for the not credit worthy and GM, Ford and Chrysler’s need to keep the lines running.
Here’s a couple of grains of salt for the last point on possible job recovery.
1- It’s CAR.
2- “extrapolates”
3- It’s 2011. Nobody knows what things are going to look like come 2011. Nobody.
I wasn’t saying the D3 execs should be flogging this stat, but it’s certainly no less misleading than the stats they are currently spreading.
With all due respect to TTAC and the NYT, a five year old with an internet connection could have figured this one out.