International Herald Tribune Editorial - The pain of U.S. autoworkers

International Herald Tribune Editorial - The pain of U.S. autoworkers
Copyright by The International Herald Tribune
Published: February 16, 2007


American autoworkers are suffering through another round of layoffs, factory closings and buyouts. DaimlerChrysler has announced that it will cut 13,000 jobs in North America. Ford Motor and General Motors offered buyouts to nearly 200,000 hourly workers in 2006.

These losses stoke fears that America's manufacturing base is disappearing. With the loss of three million American factory jobs since the end of 2000 and the trade deficit at an all-time high, it's easy to see China's spectacular growth and assume that American factories are being gutted by foreign competition.

But global competition is not the whole cause for the car manufacturers' problems, just as the answers are not to be found in protectionism.

Many of the car companies' difficulties stem from bad decisions and uninspired car designs. Chrysler lost $1.48 billion last year and Ford lost $12.7 billion, the most in more than a century, while Toyota reported record profits and sales.

The plight of the workers who have lost their jobs has to be addressed, but the U.S. manufacturing sector is far more robust than the struggle of the carmakers suggests. According to the United Nations, the United States accounted for 21.2 percent of world manufacturing in 2000. As China surged ahead in recent years, the U.S. share of world manufacturing barely budged, falling to 21.1 percent by 2005, the most recent year available. U.S. factories produced a record $1.5 trillion in goods that year.

In part, that's because foreign companies have invested so much in factory capacity in America. In a recent report, a Democratic research organization, the Progressive Policy Institute, cited government figures showing that foreign manufacturers invest billions more in the United States than American manufacturers invest abroad.

Many of the lost jobs did not drain off to foreign competition, but to technological change. Robots and computers have allowed far fewer workers to produce more than ever. That kind of high-tech manufacturing is one reason successful American companies like Boeing and Caterpillar can compete with companies in countries where the labor costs are low.

This is not to ignore the human dimension. It is too easy for free-trade advocates to blame the robots and ignore the pain of the blue-collar workers they have sidelined. The long-term answer is the vexing question of training American workers for a new world of jobs. But there are more short-term issues as well, starting with taking care of those Americans who suddenly find themselves without jobs right now.

The burden falls on pro-trade politicians and those who support them, unless they want to see high tariffs and duties, which will ultimately choke global and domestic growth. Pro-trade politicians have to make sure that a lost factory job does not mean a drastic decline in living standards. As the tide rises, America cannot allow millions to drown.