Trump, tweets couldn't save U.S. auto jobs in 2017

When Fiat Chrysler announced its decision to move production of the Ram Truck plant from Mexico to Michigan, President Donald Trump tweeted praise for the company's "very wise decision" and a promise of more to follow.

But economic analysts note that the 2,500 jobs Fiat Chrysler plans to create at the Warren Truck Plant lags the auto manufacturing jobs lost in 2017.

And despite the significant development, announced Thursday, which FCA confirmed will lead to hiring in 2020, auto industry analysts say many jobs will go to autoworkers whose jobs will have been eliminated at other plants and also by shifting temporary workers into full-time roles.

Kristin Dziczek, director of the Industry, Labor & Economics Group at the Center for Automotive Research, said manufacturing data is more complicated now than ever because of the changing roles involving suppliers and automakers as well as part-time and full-time hiring.

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“On the net, we’re down this year in automotive jobs that tie closely to production” in the U.S., she said. “Overall, we’ve flattened out if not come down a little bit in the auto industry.”

Motor vehicle and parts manufacturing employment in the U.S. declined from 788,900 in December 2016 to 783,200 in November 2017, Dziczek said.

The president's focus on job creation won support from industrial heartland voters during his campaign. And in March 2017, he praised General Motors when he flew to Detroit to highlight the importance of American manufacturing. That same day, GM announced plans for 900 new or retained jobs in Michigan within 12 months.

This week, GM confirmed a net loss of 3,500 hourly manufacturing jobs in 2017.

Trump's push for automakers to increase U.S. manufacturing jobs is hampered as companies wait to see what will be decided on trade policy, automakers and analysts told the Free Press. Dziczek and others point out that FCA's announcement protects the company should Trump pull out of the North American Free Trade Agreement and carry out threats to impose tariffs on vehicles imported from Mexico.

A few announcements may continue into 2018, but a net jobs gain versus a change in production strategy is unlikely.

"Companies are fulfilling peak demand with existing capacity. No one is going to duplicate capacity for tax purposes," Dziczek said, referencing FCA's praise of the new U.S. tax law. "We'll wait and see. But things will probably just hold steady. I don't see a big gain."

Consumer behavior also appears to be disrupting long-term product plans, as automakers pivot from producing automobiles to more SUVs, crossovers and pickups. The shifts in a highly complex auto industry that builds millions of new vehicles each year illustrates the difficulty of making employment a political promise.

“There were no big gains in auto employment in 2017. And sales will come in below 2016,” Dziczek said. “The numbers are the numbers."

Meanwhile, the auto industry is trying to decide how to devote resources in an uncertain landscape as the president talks about revising or abandoning the North American Free Trade Agreement, potentially putting tariffs on vehicles built outside the U.S., and questioning fuel economy standards. On the flip side, auto executives have praised the new federal tax changes. Both factors were cited as motivating FCA to move operations to the U.S.

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GM 'on track' for commitments

Keith Belton, director of the Manufacturing Policy Initiative at Indiana University, said labor productivity is rising, worker output is rising and it’s clear that manufacturing is on the president’s agenda.

“A lot of the proof is yet to come,” he said.

GM is hopeful about making gains, said spokesman Patrick Morrissey.

“We are on track to meet the U.S. and Michigan jobs and investment commitments announced in 2017,” he said. “A vibrant U.S. manufacturing base that is competitive globally is what we all want.”

Car sales took a dramatic and unexpected dip in sales last year, leading automakers to shift workers to SUV, crossover and pickup production. That involved relocating workers and some layoffs.

GM ended up preserving more jobs than expected in light of reducing shifts in Lordstown, Ohio, which is where the Chevrolet Cruze is assembled, and Grand River, Mich., where Cadillac CTS and ATS sedans and Camaros are assembled.

“We did take action through shift reductions in car plants this year to align production with demand,” Morrissey said.

GM went from 53,600 to 50,100 hourly workers from January 2017 to January 2018, the company said.

It maintained or created 220 jobs at the Romulus Powertrain Plant, which produces the 10-speed automatic transmission used in vehicles, including the 2017 Chevrolet Camaro ZL1. GM said it maintained or created approximately 180 jobs at its Flint Assembly Plant to support production of the Chevrolet Silverado HD and GMC Sierra HD pickups.

Morrissey was unable to provide the numerical breakdown of new and retained workers, explaining that workers are offered transfer opportunities to avoid layoffs. The Detroit-based automaker ended up retaining about 500 jobs previously planned for reduction at the Lansing Delta Township plant to support production of the Chevrolet Traverse and Buick Enclave.

Todd Trout, UAW Local 602, Lansing Delta bargaining chairman, said, “Our members are still eagerly awaiting the jobs that GM announced to much fanfare last winter in an effort to please the White House. In fact, since then, some members have suffered layoffs. While we appreciate those jobs that have been created, the reality is far short of the commitment from the press release sent out last winter.”

Trout was referring specifically to the March 15, 2017, news releases from both GM and the Trump team that garnered intense media attention. Trump's release noted specifically the 900 jobs across three Michigan plants over 12 months. “GM said the new jobs are in addition to 3,300 jobs it promised to add in the U.S. as part of its four-year contract with the United Auto Workers union that was signed in 2015.”

Trump emphasized his "buy American and hire American" initiative during a 2017 visit to the American Center for Mobility at Willow Run.

Dave Sullivan, product analysis manager at AutoPacific Inc., said GM has a good track record for delivering on promises, but keeping appropriate inventory levels is a challenge for the company.

"As consumers have shifted faster from cars to crossovers and trucks, General Motors has also had to react in a much faster way than what these automakers are accustomed to, and adapt to a rapidly changing market," he said. "Consumer preferences have changed faster than vehicle life cycles."

The UAW noted that the GM jobs retained or created are part of the labor agreement that covers the 2015-19 contract period, and no jobs have been added beyond the negotiated plan.

FCA, Ford on track

Meanwhile, Ram and Wrangler are driving activity at Fiat Chrysler Automobiles, said company spokeswoman Shawn Morgan.

"FCA US has already exceeded the employment commitments made in the 2015 UAW contract," she said. "As part of the 2016 and 2017 announcements to realign its U.S. manufacturing operations, the company committed to adding 3,700 new jobs across five facilities by 2020."

To date, nearly 1,450 jobs have been added at the first two plants involved in the realignment, exceeding the 1,000 promised at those facilities, Morgan said. "Significant incremental hiring is currently ongoing as production ramps up of the new Ram at Sterling Heights Assembly, where the company committed to adding 700 new jobs. The balance of the jobs will come online with the completion of future product actions at Toledo South and Warren Truck."

She did not provide 2016 versus 2017 manufacturing job totals for FCA.

Ford confirmed that it is on track to create or retain jobs negotiated in the 2015 UAW contracts. Ford noted that it has created or maintained 4,780 jobs since the start of the contract in November 2015 with plans to fulfill its commitment of 8,500 by November 2019.

“Ford is proud to have more U.S. hourly workers and build more vehicles in the U.S. than any other automaker,” said company spokeswoman Kelli Felker.

In the fall of 2017, the Detroit-based UAW represented about 59,000 Ford workers, 49,500 GM workers and 41,000 FCA workers and 102,000 IPS West automotive supplier workers.

Meanwhile, Honda confirmed that it added 300 full-time manufacturing jobs at the Marysville Auto Plant that produces the Honda Accord Sedan along with the Acura TLX and ILX, said company spokesman Steve Kinkade.

Toyota was unable to provide jobs data for 2017.

News reports continue chronicling a steady increase in vehicle imports from China, Mexico and India as the manufacturing sector awaits updates on policy issues related to foreign trade. Vehicle imports from Mexico reached an all-time high in 2017, according to CNBC. New data from Mexico's auto industry shows 2.33 million vehicles were exported to the U.S. in 2017, an increase of 9.4%. Seventy-five percent of the vehicles exported from Mexico were sold in the U.S., followed by Canada at just more than 8%.

As of December 2017, the U.S. had 12.5 million manufacturing jobs — 1.2 million fewer than in December 2007, when the Great Recession started, according to the U.S. Bureau of Labor Statistics.

The economy added 196,000 manufacturing jobs in 2017 — the most since 2014, when the economy added 208,000 manufacturing jobs, according to federal data.

But the manufacturing sector has yet to fully recover from the recession, according to FactCheck.org, a nonprofit and nonpartisan consumer advocacy website owned by the Annenberg Public Policy Center.

Employment figures released on Jan. 5 showed an increase of 25,000 manufacturing jobs in December 2017. That was much better than in 2016, when the economy lost 16,000 manufacturing jobs, FactCheck said. But it was not as good as 2011 or 2014, when the economy added a little more than 200,000 manufacturing jobs in each of those years.

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The auto industry makes up about 7% of U.S. manufacturing jobs, Dziczek said. "We haven’t had any big policy outcomes that would move the needle. We’ve had a lot of policy prescriptions and proposals floated. But not enough to change any data.”

Contact Phoebe Wall Howard: 313-222-6512 or phoward@freepress.com. Follow her on Twitter @phoebesaid.