The Uncertain Future of U.S. Automotive Employment


The Big Three's failure to innovate has left them and the American auto worker in peril.



Rising oil prices and declining monthly sales figures are just two of the most prominent signs that big changes are ahead in the automotive employment sector. The announcements last week by GM, Ford, and Chrysler that year-over-year sales for June had decreased by 18.5%, 28.1%, and 36%, respectively, can be partially attributed to the dire state of the economy. But the primary cause is much more fundamental: the longstanding reluctance of American car manufacturers to move away from profitable trucks and SUVs and invest in energy-efficient technologies has left the U.S. auto industry looking as imperiled as the dinosaurs whose remains provide the fossil fuels on which America's gas-guzzling automobiles run.


The impact this shortsightedness has had on automotive industry jobs is obvious. According to the U.S. Department of Commerce, over 215,000 automotive jobs have been lost since 2000, which represents a 16% decline in employment. Some of these jobs are shifting to foreign-affiliated auto companies better positioned to cater to the dominant market trends. Toyota, for example, despite suffering an 11.5% drop in year-over-year June sales, had a 4.4% increase in sales of more fuel-efficient passenger cars. Foreign companies now provide about 63,000 auto jobs in the U.S., an increase of 52% since 1995.


The employment trajectories of the U.S. automotive parts and automotive manufacturing jobs sectors have followed different paths to the same end. Motor vehicle assembly employment decreased by 8% between 1990 and 2005, while employment at auto parts companies increased by 8% over the same period. However, since 2000, employment in the auto parts sector has decreased by 17%, or nearly 174,000 jobs, a trend that has undoubtedly been accelerated by the decline in car manufacturing.


Jobs in sales and installation, maintenance, and repair are among the few automotive careers expected to show significant growth over the next decade, according to statistics from the U.S. Bureau of Labor. Automotive service technician and auto mechanic jobs are projected to increase by nearly 20%. Though a 13.4% increase is expected in car sales jobs in the retail sector (compared to 2.1% in the parts sector), increased competition from online vendors may alter the nature and decrease the number of new auto sales jobs.


Will eco-friendly models from the Big Three be able to turn U.S. automotive employment around? A recent BusinessWeek cover story on GM and their Chevrolet Volt plug-in hybrid suggests that the odds—and economics—are against them. Whereas Toyota can produce hybrids right now at the cost of $4,000 a car, GM estimates that they'll be lucky to cut costs to $10,000 per hybrid by 2010.


--Joshua Avram

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