U.S. auto assembly plants are booming. Let's hope parts manufacturers are in on the good times
USA Today's Chris Woodyard says U.S. automakers are "pushing factories and workers to the limit to try to meet burgeoning demand for new vehicles":
Some plants are adding third work shifts. Others are piling on worker overtime and six-day weeks. And Ford Motor and Chrysler Group are cutting out or reducing the annual two-week July shutdown at several plants this summer to add thousands of vehicles to their output.
Thanks to slimmed down production, a modest economic resurgence, and a renewed interest in buying American-made, U.S. auto plants (particularly Chrysler, Volkswagen, Hyundai, and Toyota) are humming. Woodyard says that car sales for 2012 are estimated at 14.3 million vehicles, compared with 12.8 million last year.
But lost in the good news is a potentially larger problem. Yes, auto assembly plants are thriving. But what about America's auto parts maufacturers?
When automakers put together their cars, they assemble literally thousands of smaller components into a finished product. All of those auto parts (everything from screws and ball bearings to pistons and brake pads) come from smaller machine shops throughout the U.S.
Worryingly, this auto parts supply chain is under attack from subsidized Chinese competition. More than 400,000 jobs in the U.S. auto supply chain have been lost since 2000, and another 1.6 million U.S. jobs are at risk unless China's illegal trading practices are curtailed.
Since 2001, according to an Alliance for American Manufacturing (AAM) investigation, $62 billion worth of Chinese auto parts have been imported into the U.S., causing the auto parts trade deficit between the U.S. and China to increase by more than 850%.
How has China been able to overtake U.S. parts producers?
Beijing has pumped $27 billion of subsidies into its auto parts sector, with an additional $10 billion planned. China also blocks U.S. exports of autos and auto parts while favoring its own industry, in direct violation of the commitments it made to free markets when it joined the World Trade Organization.
This subsidized attack on the U.S. auto parts sector needs to be investigated thoroughly by the Obama Administration.
Click here to sign a petition to Congress telling them to crack down on China's cheating.
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