Promises made on the part of President Donald Trump to revive the struggling manufacturing industry, face new headwinds as the automotive sector announced thousands of new layoffs.
The downsizing comes as the auto industry faces declining growth after a post-recession rebound. Ford has said it will cut about 20,000 jobs in less than a year, whereas General Motors has cut production at four U.S. assembly lines, costing 4,400 workers their jobs. Fiat Chrysler laid off another 1,300 workers at their assembly line in Detroit.
Mark Muro, a senior fellow at the Brookings Institution’s Metropolitan Policy Program, estimates that auto jobs represented 60 to 80 percent of overall manufacturing job growth after the recession. That growth resulted from auto purchases delayed during the recession, though now those catch-up sales have plateaued.
“I think that when we talk about making American great again, a lot of that is tied up in how auto manufacturing is doing,” Muro said.
“This next period, auto will not drive the overall manufacturing [sector], will not generate significant manufacturing employment.
Muro’s research shows the auto industry has shed jobs in 45 of the nation’s 100 largest metropolitan areas in the last year.
“The question is, what’s going to happen now?” Muro asked. “One possibility is auto goes flat and nothing else really picks up, so we really have a very tough manufacturing story for the next few years.”
When Ford announced last year that it would not move production of its Ford Focus to Mexico, President Trump hailed the decision as a victory. However, he didn’t offer a comment this week when Ford said it would move production of the Ford Focus to China, a decision that could hurt the broader American auto sector.
Experts say automotive jobs that move to Mexico still benefit the United States, where parts makers still employ tens of thousands of people. Automotive manufacturing in China is much less likely to rely on American-made parts. Cyclical slowdowns are normal in an industry that has ebbed and flowed for generations.
“We’ve had an extraordinary rebound in auto sales, to essentially record levels, and so nobody should be surprised if the industry softens a bit,” said Steven Rattner, who led the Obama administration’s task force on the auto industry at the height of the recession.
“It’s a cyclical industry, and sometimes people buy more cars, and sometimes they buy fewer cars.”
Yet some industry analysts believe this slowdown presages a broader shift in the thinking of major auto companies. They say that trends affecting the industry are likely to be a drag on manufacturing, though U.S. companies are likely to increase their hiring in other fields. With the prevalence of ride-sharing companies like Uber and Lyft, and the nascent beginnings of self-driving automobiles, families are likely to have less use for multiple vehicles.