The Auto Industry's Comeback Continues

William Ree4d | 5/3/2012, 11:52 a.m.

The Obama 2012 campaign slogan should be "Osama bin Laden is dead and General Motors is alive."

President Barack Obama's role in the death of bin Laden troubles some, but his decision early in his presidency to extend billions in loans to General Motors and Chrysler has paid off. More than two years ago, the American auto industry teetered on the brink of collapse. Now, it has rebounded and has started to make vehicles for America's future. Plants are hiring more workers, manufacturers are returning to profitability, exports of U.S. vehicles are increasing and some of the most technologically advanced vehicles are now being designed and produced in this country. The $80 billion bailout was President Obama's "bet on the American worker" and there have been ample signs of success in the automotive industry since Obama's bailout.

The news coming out of the U.S. automotive industry has been good for Black Americans. The automotive industry's financial crisis was more devastating for African Americans than any other community and eroded a half-century's economic gains by the Black middle class. From Blacks who left behind subsistent jobs in the South for high-paying factory jobs in the North during the Great Migration, to entrepreneurs and contractors in automotive businesses, the automotive industry has been a major factor in the formation of the Black middle class. In 1945, Blacks comprised 15 percent of the automobile industry workforce, by the late 1970s, "one of every 50 African Americans was working in the auto sector." From 1979 to 2007, Black employment in the auto industry fell to one in 100.

Black Americans greeted President Obama's 2012 Washington Auto Show announcement that "the U.S. auto industry is back" with great anticipation. After hitting a 30-year low in 2009, U.S. auto sales are poised for a second straight year of growth - the result of easier credit, low interest rates and pent-up demand for cars and trucks created by the recession.

Black groups and activist should move to forge increased employment, contracting and community partnerships with U.S.-based auto manufacturers as they crank up their factories and add thousands of jobs. In addition to the expanded plant operations and employment opportunities occurring among Detroit's Big Three, foreign-owned auto companies such as Toyota, Honda, Nissan, Hyundai, Kia, Volkswagen and BMW have invested $44 billion into their U.S. operations to account for 80,000 direct vehicle-manufacturing jobs and 500,000 dealer and supplier jobs.

Automotive manufacturing can help Blacks. The industry is adding jobs at a faster pace than airplane manufacturers, shipbuilders, health care providers and the federal government. Americans spent $40 billion more on new cars and trucks in 2011 than in 2009. The momentum in auto sales is likely to continue because people need to replace aging cars, of which the average age is 11 years old. A substantive number of Americans are feeling more comfortable about their employment outlook and where they're going. Domestic vehicle sales are expected to reach 17 million around 2018 as 70 million "Millennials" - born between 1981 and 2000 - buy cars and set up modern households. These customer purchases will generate manufacturing activities that have the potential of reviving long distressed populations and industrial sectors. Increasing manufacturing can turn long-suffering Rust Belt cities like Anderson, Ind., Youngstown, Ohio, Lansing, Mich., and Kokomo and Elkhart-Goshen, Ind., into revived and fast-growing cities. The industry's growth enhances Black Americans' jobs and contracting opportunities.

It's time Blacks take Obama's bold "bailout move" to the next level. Innovation through education and research is vital to building a manufacturing economy. Creating a qualified workforce of technicians and engineers is essential to ensuring future success of America's automotive industries. Black leaders and teachers must make sure workers have the skills they need for jobs today and in the future. We need to train our people with skills that will lead to jobs for them. Above politics, we each need to engage in development programs and policies that help people get and hold jobs.

(William Reed is head of the Business Exchange Network and available for speaking/seminar projects via the Bailey Group.org)