The Plain Truth on Auto Jobs

Fri, 11/02/2012

FROM: The Huffington Post, Nov. 2, 2012.

"The Plain Truth on Auto Jobs"

By Scott N. Paul

In this “Jobs Election,” voters deserve to know the truth about the U.S. auto industry. The Obama Administration’s auto rescue preserved hundreds of thousands of middle-class jobs in America, and didn’t send Jeep jobs to China. Otherwise, I’d be among the first to call them on it.

It’s bad enough that Mitt Romney’s paid advertisements aren’t telling the truth about the auto rescue. Even worse is what his own policies could mean for keeping auto jobs in America.

Mitt Romney might not have actually written the words “Let Detroit Go Bankrupt,” but his statements against the auto rescue could have set the stage for “Let China Own Detroit.” There’s a very real chance that under Mitt Romney’s plan for the American auto industry in 2009, GM and Chrysler could have been bought by the Chinese—before or after liquidation. Heavily subsidized firms in China were among the most active players in asset acquisition and capital markets at that time; few others had the cash. When given the opportunity, Chinese firms did buy Volvo and wanted to buy GM’s Hummer before the deal fell apart in 2010.

President Obama, in addition to the auto rescue, has taken several important steps to keep auto and supply chain jobs in America. He battled a surge of Chinese tire imports in 2009, which Romney opposed. In September, the President launched a World Trade Organization case against unfair trade practices in China’s auto and auto parts sectors, which Romney mocked but otherwise ignored. Yes, Mitt Romney has pledged to crack down on China’s currency manipulation—a move I welcome—but the positions he has taken on real-world attempts to create a level playing field for American workers and businesses have fallen woefully short.

While China won’t be shipping cars to the U.S. in large quantities any time soon, the facts in the auto parts sector are quite different. China’s market penetration in the United States has increased by 25 percent each of the past two years. Our annual auto parts trade deficit with China is now over $10 billion. We can’t afford to let China’s cheating disrupt the stunning recovery underway in America’s auto sector.

American brands are popular in China. But only 150,000 of the 18 million autos sold in China last year were made in America. That’s because the Chinese government has a policy: “If you want to sell it here, you must make it here.” It’s one of the reasons why Jeep has plans to manufacture in China. And, it’s why President Obama has launched a trade case against China on these auto restrictions. Like me, he’d rather see Jeeps stamped “Made in America” and shipped to China.

Either way, the implication made by the Romney ad plays on the fears of millions of American manufacturing workers who face the very real threat of having their jobs outsourced. These workers don’t deserve pandering, nor do they deserve falsehoods.

The threat posed by Chinese economic policies to auto-related jobs in America is very real. But Mitt Romney’s claims on GM and Chrysler just aren’t. The Obama Administration’s auto rescue program was far from perfect, but it did save jobs, brands, communities, and a very long supply chain. American consumers have better choices, many communities see a better future ahead, and the rescued brands are gaining or holding market share.

If Romney wants to hit the Administration on China, he should stick to its failure to address China’s currency undervaluation. His attacks on the auto rescue smack of desperation at this final stage of the campaign.

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