July 2011

Auto Recovery Boosts Jobs
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In 2008, Evansville, Ind., Local 16 Business Manager Paul Green feared that one of the bedrocks of the local economy, General Motors' Bedford powertrain plant, was in danger of shuttering its doors for good.

"It looked like it was gone," Green says of the factory that employs 400 people, including more than 35 Local 16 electricians who help maintain the facility.

Teetering on the edge of bankruptcy after the onset of the economy's nosedive, General Motors, along with Chrysler, was rescued by the federal government in exchange for cuts to wasteful spending and improved products.

The administration argued that letting the big automakers fail would devastate the economic security of thousands of working families whose members assemble automobiles, small businesses in their communities and thousands more workers who produce automobile parts or work on maintenance and construction of facilities.

Now posting its first profits in years, Detroit is putting billions back into the economy—investments that are helping make the Big Three competitive again and putting Americans back to work.

Popular new models and improved older models are selling hot, boosting Ford, Chrysler and General Motors' reputation in the marketplace.

"Many people thought the [GM] bail-out (and a smaller one involving Chrysler, an even sicker firm) unwise … Yet the doomsayers were wrong," wrote the Economist magazine.

GM is expanding production and adding jobs, announcing in June that it would invest $49 million in new tooling and equipment for the Bedford plant to produce more fuel-efficient transmissions, which is expected to save or create 91 jobs.

"It shows that the investment the taxpayer put into the auto industry is paying off," says Green. "Those jobs don't just help those workers inside the plant, but the entire community."

The Bedford investment is part of a $2 billion commitment by the automaker to revamp 17 factories in eight states, which is expected to save or create 4,000 jobs.

Since GM and Chrysler emerged from bankruptcy, the auto industry has created 115,000 jobs. The auto industry's turnaround has already put many unemployed IBEW members to work and hundreds more will reap the benefits of the industry innovation and expansion projects in the works.

"The government's intervention was absolutely key to helping create a chance for GM and Chrysler going forward," says Alan Mulally, CEO of Ford Motor Company. "That's why I testified on behalf of GM and Chrysler, as you know. The reason we did was that we believed—like two presidents [Bush and Obama]—that if GM and Chrysler would have gone into freefall bankruptcy, they would have taken the supply base down and taken the industry down plus maybe turned the U.S. recession into a depression."

Chrysler, which recently repaid its outstanding loans to the U.S. treasury six years ahead of schedule, announced its intention to invest an additional $843 million into its transmission facilities in Kokomo, Ind., bringing the total investment in that community to $1.1 billion, and retaining nearly 2,250 jobs.

Kokomo Local 873 Business Manager Joseph Cousino has dispatched members to Chrysler plant upgrade projects for the past two years. Cousino is hopeful that an expansion of the Jeep plant and an engine plant in Defiance, Ohio, will boost the incomes and security of more unemployed members.

In Baltimore, members of Local 24, who just completed a project installing solar panels on the roof of General Motors' Allison Transmission plant in White Marsh, are looking forward to an expansion of the plant to produce engines for hybrids.

Local 24 Business Manager Roger Lash, who attended a May ground-breaking ceremony with Maryland Gov. Martin O'Malley, says up to 100 members will be working for a year on a $50 million electrical contract under the National Maintenance Agreement.

"As the auto industry tottered on the brink, some of our nation's political leaders opposed the Obama administration's rational and effective plan to help the industry in return for helping itself," says International President Edwin D. Hill. "They were dead wrong. All IBEW members owe a debt of gratitude to President Obama and those leaders in Congress who showed their respect for American workers by helping save the U.S. auto industry."

The resurgence of the U.S. auto industry is one of the few bright spots in the American economy in the last two years.

Photo Credit: General Motors