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Ohio's Auto Recovery Highlights Republican Failure

By German Lopez · October 10th, 2012 · Commentary
commentary 2012-10-10
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When President Barack Obama said America’s auto industry is “roaring back” during the Oct. 3 presidential debate, Mitt Romney was quiet. Romney, who had a strong debate performance according to most political pundits, seemed content with avoiding the subject. Taking a look back at the results of Obama’s $85 billion bailout of the auto industry, it’s easy to see why.

The auto bailout represents perhaps the greatest failure of Republican economic policy in recent years, so it’s of little surprise that some Republicans might try to downplay its success or just stay quiet about it. The latter is the approach taken by Josh Mandel, the U.S. senatorial candidate for Ohio who has repeatedly dodged questions about whether he supports the auto rescue. Last week, Gov. John Kasich took the downplaying approach when he told reporters Ohio was down “500 auto jobs.”

For anyone keeping track of the auto industry since the Great Recession started, Kasich’s comment is surprisingly negative. Since the auto bailout, Ohio’s auto industry has actually grown by more than 17,000 jobs. That’s not enough to make up for the nearly 40,000 jobs lost due to the Great Recession, but it’s quite the recovery.

But PolitiFact Ohio found Kasich’s claim to be true, so there must be something to it. According to the fact-checking organization, Kasich was using Bureau of Labor Statistics (BLS) numbers on motor vehicle manufacturing and motor vehicle parts manufacturing. Since Kasich took office, the first category saw an increase of 700 jobs; the latter saw a decrease of 1,200 jobs.

So Kasich’s numbers are right when looking at those specific categories and only looking at his time in office. 

The bigger picture is not so bad. The auto industry as a whole — meaning Kasich’s two categories and the additional category of motor vehicle body and trailer manufacturing — has grown by more than 6,600 jobs since Kasich took office. Looking at just Kasich’s two categories and expanding the timeframe shows the auto industry has grown by 8,900 jobs since June 2009.

It’s not surprising to see a Republican downplay all of this. While Kasich never supported or opposed the auto bailout, his political party was far from accepting when Obama pushed the idea. Shortly after Obama’s election in 2008, Romney wrote an op-ed in The New York Times with the headline “Let Detroit Go Bankrupt” — indicating that Detroit, the capital of America’s auto industry, should be allowed to fall.

Romney’s editorial contained a bit more nuance than the headline suggests, but with it in mind, it’s no surprise the Republican candidate was mute about the auto industry even when Obama gave him room to air out his stance in a live debate.

To be clear, it’s not just Ohio’s auto industry that has seen massive growth. The auto rescue has been followed by a nationwide surge. In September, total auto sales were up 13 percent, and industry analysts estimate car sales will reach about 14.5 million by the end of the year — up 1.1 million from 2011. Chrysler reported a 12 percent increase from the year before — its best September sales in years. Ford, the only Big Three company that did not get a bailout, and General Motors (GM) reported relatively flat gains in September, but in August, GM was up 10 percent and Ford was up 13 percent in comparison to the year before.

Even green initiatives have seen gains in the auto industry. While conservatives insist electric cars like the Chevrolet Volt are flops, GM recently announced the Volt is selling more than roughly half of the more than 260 car models sold in the U.S. September was the Volt’s best month with 2,851 units sold — almost four times the 723 units the electric car sold in September 2011.

To be fair, the auto industry and rescue still have a few problems. The slow September sales for GM and Ford are a little worrying, and the U.S. Treasury estimates the federal government will be down more than $25 billion due to the bailout. Most industry analysts agree the Detroit companies still need a lot of work if they want to fully recover. Poor performance in European markets is a continuing sore spot for the Big Three.

Still, the auto industry is one category in both the U.S. and Ohio that shows the success of government intervention. Unsurprisingly, that’s making a lot of Republicans quiet. 

 
 
 
 

 

 
 
 
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