September Jobs Data Show Auto Industry Strength Powered by Fuel Efficiency

The latest national auto industry employment figures released by the Bureau of Labor Statistics (BLS) today show what has been apparent for virtually all of 2012: the American auto industry is roaring back from the 2008-9 recession in a major way. Specifically, the BLS preliminary estimates for September 2012 show that the auto industry has added 231,600 jobs in the last three years.

We compare employment today to when the auto industry was at its lowest point of employment, or “trough”, in June 2009. Since the trough, nationally, the auto industry has gained 152,300 jobs in motor vehicles and parts manufacturing and 79,300 jobs at auto dealerships, or 231,600 total. These figures represent gains of 14.2% for the industry as a whole, 24.4% for motor vehicles and parts manufacturing, and 7.9% at auto dealerships. 

Focusing in on the three largest auto-producing states, Michigan, Ohio and Indiana, we find they have made gains in auto sector employment as well. Referring to August 2012 BLS data (the most recent data available at the state level) we see that these three states combined for 36.1% of auto manufacturing jobs nationwide, and that collectively, the three states saw an increase of 62,800 jobs in August, for a gain of 28.6% since the trough in June 2009. Michigan’s auto industry has seen the largest increase, adding 33,400 jobs for gain of 32.0%. Indiana's auto manufacturing employment grew by 19,800 jobs for a gain of 39.8%. Finally, Ohio's auto sector also is seeing robust growth with 9,600 jobs added for a gain of 14.7% since the trough of June 2009. 

While there are a number of reasons for the rapid turnaround and growth of the auto industry, one key reason that many overlook is the influence of regulatory certainty that has been achieved through the Obama Administration’s recently-finalized fuel efficiency standards.  While increasing fleetwide fuel efficiency to the equivalent of 54.5 mpg by 2025, the standards will save consumers $1.7 trillion in avoided fuel costs over the life of the program, and a 2025 model year auto will save consumers over $8,000 in net costs over the life of the vehicle compared to a 2010 vehicle. Those are just a few of the hard numbers regarding the fuel efficiency standards’ positive impacts (for more analysis of the benefits of the standards, please see my post from August 28th taking a deeper dive into the data) but there are broader positive impacts to point out as well.

Earlier this week, Ward’s Auto released the September 2012 auto sales figures, which showed a 12.7 percent increase from September 2011, for a seasonally-adjusted annual rate (SAAR) of 14.9 million, which is (higher than any point since August 2009’s “Cash for Clunkers” program’s 14.6 million SAAR). While these figures may appear to just reflect an auto industry on the mend after a terrible past few years, the fact is, these sales increases were achieved in the context of high oil prices, which, as my colleague Roland Hwang has noted, is unprecedented in modern American history. Furthermore, recent months have been setting records for new-car fuel efficiency across the fleet (and this month continues the trend at 23.8 mpg, window sticker). 

As Roland noted in his blog post last month:

…automakers are now better-positioned than ever before to meet drivers’ demands for more fuel-efficient vehicles. In large part, the auto industry’s newfound resilience can be attributed to a more stable regulatory and investment environment as a result of the historic 35.5 mpg average carbon pollution and fuel efficiency standards brokered in 2009 by the Obama Administration and agreed to by the major automakers, Caifornia, UAW, environmental leaders, and other key stakeholders. This stability and predictability will continue beyond 2016 thanks to the new 54.5 mpg by 2025 standards finalized by the Department of Transportation and the Environmental Protection Agency…

Resilience, stability, predictability. These are terms that are music to automakers’ and auto workers’ ears after years of turbulence in their industry. 2012 has been the year that the auto industry has begun to rebuild, reboot and innovate on a broad scale in order to meet the 2012-2016 standards. Consumers are demanding more fuel efficient vehicles and automakers are ready with a bumper crop of popular models that go farther on a gallon of gas, thanks to the stable technology investment environment provided by standards.  

The auto industry jobs figures reflect automakers’ success in meeting consumer demands, boosting company revenues and driving them to hire workers on a scale not seen for years. Many of these newly-hired or re-hired workers are now helping to build the multi-speed transmissions, electric power-assisted steering modules, and other fuel-saving technologies that will combine to redirect consumer dollars from going to oil into families’ pockets. 

But you don’t have to take my word for it. Check out the jobs data and other information at DrivingGrowth.org, which includes videos of innovators, college students and automakers’ employees discussing how they are working together to make current and future vehicles go farther per gallon. Stories like these help us put faces to the auto industry hiring numbers, and to realize that underlying the monthly jobs numbers are genuine benefits and stories of hope for families and communities all across the country.  What’s more, while the auto industry has had plenty of booms and busts in the past, thanks to the new fuel efficiency standards, the current ongoing recovery will be the greenest one yet. Now that’s something we can all celebrate.