White House: Auto Industry Jobs Up, Time For A Change?

The White House has a new report out touting the “resurgence” of the automotive industry, primarily aimed at depicting President Obama’s auto bailout as an unqualified success.

One thing that springs out of the report are claims it makes as to job creation within the industry as compared to job losses projected by the White House and sustained prior to the bailout. The report states that:

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.

And:

It was the interdependence between the auto companies and suppliers, dealers and communities that led some experts at the time to estimate that were GM and Chrysler allowed to liquidate, at least 1 million jobs could have been lost.

And:

In the year before President Obama took office, the industry shed over 400,000 jobs.

This is interesting, some observers say, in view of action the Obama administration is currently contemplating that would impact the auto industry, potentially very adversely: Vastly increasing Corporate Average Fuel Economy (CAFE) standards for model years 2017-2025.

While the administration is clearly keen to tout what it sees as a clear record of having saved or created auto industry jobs, depending on how it handles CAFE standards moving forward, that record could potentially be vastly diminished, undercutting claimed gains. According to a recent U.S. Energy Information Administration report projecting the impact of increased CAFE standards:

As a result of higher vehicle prices, total new LDV sales in 2025 are 8 percent lower in the CAFE3 case and 14 percent lower in the CAFE6 case than in the Reference case.

In plain English, experts say that translates to “as a result of automakers having to vastly raise the fuel economy of their fleets — to an average of about 45 miles per gallon in the case of CAFE3 and to about 60 miles per gallon in the case of CAFE6– and therefore make more expensive, green cars, sales would decline by 8 percent and 14 percent, respectively.” And here is the kicker: Where sales decline by that kind of measure, it is reasonable to also expect job losses within the auto industry.

Political strategists with whom Big Government spoke say job losses in this sector could prove a major liability for a President suffering from lagging approval ratings where economic matters are concerned, who is focused on trying to eke out wins in Midwestern states where the industry maintains a major presence.

Setting more moderate CAFE standards would likely prove a more economically, and politically, viable choice, though it remains to be seen where the administration will come down on this.

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