A decade ago, the U.S. auto industry employed about a million workers; at its low point just over half that number. Falling victim to global competition, lack of innovation and the economic recession, the Big Three automakers were in near-bankruptcy.
In 2008, the Obama Administration rescued two of the Big Three automakers – General Motors and Chrysler – from financial ruin with a nearly $25 billion handout. The administration was heavily criticized for the move by many, including now-GOP presidential candidate Mitt Romney, who wrote a New York Times piece in 2008 titled "Let Detroit Go Bankrupt."
This week, automakers announced that the wheels are back on the road – and jobs are back on the horizon. Ford Motor Company and Chrysler Group will be adding close to 6,000 factory workers at their plants in Michigan, Kentucky and Illinois. California will gain more workers from electric car makers Tesla Motors and Coda Automotive.
Why the boom? Auto sales are up – nearly 13 million cars were sold last year, the most since 2008, and sales this year are expected to reach $13.8 million. So, did the bailout work? The administration is trumpeting the rebound as a triumph, but they can’'t take all the credit: many more jobs will arrive thanks to foreign automakers, whose fluctuating currencies are leading them to increase production in their U.S. plants.
German companies Mercedez-Benz and BMW will be adding 1,500 jobs. Japan's Nissan is also shifting production to the U.S.; South Korean companies Hyundai and Kia may follow suit. In all, according to the Center for Automotive Research, total payrolls could reach 650,000 employees in 2012, a 10 percent gain over last year.
It's all good news for American workers – maybe not so much for Republican presidential hopefuls. The 2012 campaign is shaping up to be all about jobs, jobs, jobs, and this news could put a tiger in the president's tank. Will the bailout pay off for the Obama campaign?
Daniel J. Ikenson, Director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute
Dan Neil, Automotive Columnist & Senior Editor, “The Wall Street Journal;” Neil is at the Auto Show in Detroit