PUBLIC RADIO'S MARKETPLACE COMMENTARIES:

The Future of American Auto Making

Robert B. Reich

Marketplace, September 20, 2006

Once it gets through its latest round of job cuts, Ford will have fewer American workers than Toyota. General Motors has become a shadow of its former self. The only car on its drawing board that has a chance of big sales will be built in South Korea. Meanwhile, Chrysler is swimming in red ink and planning major plant closings. By the way, Chrysler is now part of Daimler-Chrysler, headquartered in Germany.

Detroit's Big Three are shrinking into the Small Three. They now employ 15 percent fewer workers than they did a decade ago, and half the number they employed forty years ago. Meanwhile, Toyota, Honda, and Nissan are the New Three. Toyota is inching up on GM, and Honda is surpassing Chrysler.

But here's the truly stunning thing: Toyota, Honda, and Nissan are making most of the cars they sell in the United States here in the United States, with American workers. And they're building new plants in the U.S. as fast as they can. In a few years more Americans will be working for Japanese automakers than work for American.

Does it really make any difference? Maybe to our national pride.

But, hey, we have the largest retailer in the world, don't we? Wal-Mart now employs more people than does the entire U.S. auto industry. We also have the world's largest and most expensive health care industry and biggest military. Over the last five years, health care and the military have been responsible for almost all the net new jobs created in America.

But the real issue isn't the number of jobs. It's their quality, and that's the big problem. Detroit's Big Three paid wages, health and pension benefits that together amounted to about $80 an hour in today's money. The Japanese transplants in America pay half as much. Wal-Mart pays less than a quarter as much. Meanwhile, hospital orderlies and elder-care workers don't come near matching the United Auto Workers at the old Big Three. And military work is just plain dangerous.

So as the Big Three shrink, we ought to be making up for the good jobs we're losing. One place to start would be for the nation to invest in emerging industries like bio-technology, non-fossil based energy, new materials, and nano-technologies. Out these could come the good middle-class jobs of the twenty-first century - technician-type jobs involving upgrading, installing, repairing, injecting, testing, or improving upon a host of products designed to prevent the spread of dread diseases, give us energy without further warming the globe, and improve the speed and durability of countless items.

Even now, there's a large and growing demand for pharmacy technicians, lab technicians, hospital technicians, and office technicians. In this post auto-worker age, young people need some education beyond high school to get these and other technical skills of the future.

The sad fact is they aren't getting them. According to a recent report of the National Center for Public Policy and Higher Education, the post-boomer generation is less educated than the boomers, and less able to afford college. Their families can't afford the cost. And government isn't filling the gap. Pell Grants for college are less available than they were a decade or two ago. Colleges are less affordable. Federal money for job training is drying up.

There's no bringing back the Big Three. But shame on us for turning our backs on the big picture.