Obama’s Funny Auto-Jobs Math
Yes, the auto industry has added jobs, but not the companies we bailed out.


John Berlau

‘The auto industry has added 113,000 jobs over the past two years.” So proclaimed President Obama in his speech Friday at the Chrysler-Fiat plant in Toledo, Ohio, his tone triumphal despite the horrific unemployment numbers that had been released that very morning. 

Automotive jobs numbers are cited to end the argument against anyone who objects to the bailout/takeover of General Motors and Chrysler. The White House has largely abandoned the projection that bailout funds will be recovered fully after critics — including my Competitive Enterprise Institute colleagues Hans Bader and Sam Kazman — pointed out the shuffling of government loans to allow GM to claim deceptively that it had repaid taxpayers “in full.” Now the White House is projecting a $14 billion taxpayer loss, and so is putting the focus on the jobs added to the sector supposedly as a result of the bailouts

But we need to look under the hood of those employment claims. And in this case, the first place to look is a June 1 Cleveland Plain Dealer story by Robert Schoenberger that seemingly contradicts the president’s figures for auto job growth. Schoenberger reported the sobering fact that even after the Bush and Obama administrations spent $62 billion to bail out Chrysler and General Motors, “the two automakers employ 16,500 fewer people than they did in 2009.”

How can these two statistics — 113,000 new jobs and 16,500 fewer auto workers — simultaneously be true? After all, Obama didn’t say “saved or created” — although there was plenty of that elsewhere in the administration’s talking points of the bailouts’ supposed success — he said “added.” And other administration officials and documents also specifically used the term “added” or “created” with the similar statistic of 115,000 jobs when touting the bailouts.

But the fine print, in Obama’s speech quoted above and the quotes listed below, is the artful use of the term “industry” or “auto industry.”

On June 1, for example, the White House issued a report claiming, “Since GM and Chrysler emerged from bankruptcy, the auto industry has created 115,000 jobs.” Treasury Secretary Tim Geithner chirped the same statistic in an op-ed in the Washington Post, bragging that since GM filed for bankruptcy, “the industry has added new shifts and 115,000 jobs.”

So how could the “auto industry” have added thousands of U.S. jobs when GM and Chrysler cut jobs? It so happens that both statistics are correct if the reader or listener understands what’s being referred to. But the Obama administration is obscuring what many would consider important information about the nature of the jobs to give undue credit to the bailouts. And that is that many of the jobs added by the “auto industry” have been created by foreign-owned automakers in nonunion states far away from the plants of the bailed out companies — not by GM or Chrysler.

A White House infographic and earlier White House “brag sheets” and reports attribute the job-growth figures to the Department of Labor’s Bureau of Labor Statistics. And indeed BLS’s industry category of “motor vehicle and parts manufacturing” does show substantial growth since the summer of 2009 — near the bottom of the recession.

Jobs in this category had been steadily falling since well before the recession, from 1.1 million in 2005 to around 950,000 by the end of 2007. BLS figures show that number of jobs reached a low point of 623,000, when the government took GM into bankruptcy, and rose to 695,000 this March, a gain of 72,000. That’s somewhat less than the administration’s figure of 113,000, and it’s not entirely clear from its charts where the start and end data points are. But I’ll cut the administration some slack on this, since even 72,000 is an impressive gain.