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Report Details Resurgence of the American Automobile Industry

June 7, 2011

In 2009, as the U.S. economy sputtered from near-collapse to deeply recessionary, the Obama administration committed federal funds to help save the U.S. auto industry from the brink of disaster.

The administration argued that letting the big automakers fail would devastate the economic security of thousands of working families whose members assemble automobiles, small businesses in their communities and thousands more workers who produce automobile parts or work on maintenance and construction of facilities.

A June 1 report reveals that the then-controversial strategy of providing assistance to General Motors and Chrysler—in return for major steps by auto executives to cut wasteful spending and improve products—has been successful. 

Since GM and Chrysler emerged from bankruptcy, the auto industry has created 115,000 jobs, its strongest period of job growth since the late 1990s. GM, Ford and Chrysler have all returned to profitability, and in 2010, the “Detroit three” gained market share for the first time since 1995.Says Alan Mulally, CEO of Ford Motor Co.:

The government’s intervention was absolutely key to helping create a chance for GM and Chrysler going forward. That’s why I testified on behalf of GM and Chrysler, as you know. The reason we did was that we believed—like two presidents [Bush and Obama]—that if GM and Chrysler would have gone into freefall bankruptcy, they would have taken the supply base down and taken the industry down plus maybe turned the U.S. recession into a depression.

General Motors is expanding production and adding jobs, while Chrysler recently repaid its outstanding loans to the U.S. Treasury—six years ahead of schedule. Popular new models and improved older models are selling hot and have boosted Ford, Chrysler and GM’s reputation in the marketplace.

The auto industry’s turnaround has already put many unemployed IBEW members to work and hundreds more will reap the benefits of industry innovation and expansion projects in the works. In Baltimore, members of Local 24, who just completed a project installing solar panels on the roof of General Motor’s Allison Transmission plant in White Marsh, are looking forward to an expansion of the plant to produce engines for hybrids.

Local 24  Business Manager Roger Lash, who attended a May ground-breaking ceremony with Maryland Gov. Martin O’Malley, says up to 100 members will be working for a year on a $50 million electrical contract under the National Maintenance Agreement. The Allison expansion is just one of several planned by GM. 

Chrysler recently announced its intention to invest an additional $843 million into its transmission facilities in Kokomo, Ind., bringing the total investment in that community to $1.1 billion, and retaining nearly 2,250 jobs.

Kokomo Local 873 Business Manager Joseph Cousino has dispatched members to Chrysler plant upgrade projects for the past two years. Cousino is hopeful that an expansion of the Jeep plant and an engine plant in Defiance, Ohio will boost the incomes and security of more unemployed members.

Says International President Edwin D. Hill:

As the auto industry tottered on the brink, some of our nation’s political leaders opposed the Obama administration’s rational and effective plan to help the industry in return for helping itself. They were dead wrong. All IBEW members owe a debt of gratitude to President Obama and those leaders in Congress who showed their respect for American workers by helping save the U.S. auto industry. This report needs to be read and circulated to those who are still confused about the automobile industry’s rescue.