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EDA: Economic Recovery in Fremont, California's Auto Community

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Ed. note: Cross-posted from U.S. Department of Labor's "Auto Communities" blog by Matt Erskine, Acting Assistant Secretary of Commerce for Economic Development (EDA)

We all know the situation a few years ago when President Obama took office: the American auto industry was shedding jobs by the hundreds of thousands and General Motors and Chrysler were in financial crisis. In the year before GM and Chrysler filed for bankruptcy, the auto industry lost more than 400,000 jobs. Had President Obama failed to act, conservative estimates suggest that it would have cost at least an additional million jobs and devastated vast parts of our nation's industrial heartland. But that did not happen because the president quickly intervened to save the U.S. auto industry from collapse. Today, GM, Ford and Chrysler have all returned to profitability.

President Obama's decision to respond so boldly was about more than the auto companies. It was about standing behind the countless workers, communities and businesses—large and small—that depend on the automotive industry. It was also about revitalizing American manufacturing.

Across the administration, federal agencies have outlined an agenda to support growth, job creation, and competitiveness in U.S. manufacturing. The U.S. Commerce Department's Economic Development Administration (EDA) has a strong track record of working with automotive communities to develop plans for economic recovery. The agency's efforts to help revitalize the nation's auto industry have been significant in Fremont, California, where a large auto assembly facility operated by the New United Motor Manufacturing, Inc. (NUMMI) was shut down in early 2010. The plant had employed nearly 5,000 workers, with thousands more dependent on it. The blow to the local economy was severe.

Despite the eventual purchase of a portion of the plant by Tesla Motors in late 2010, officials in Fremont were acutely aware that they had an obligation to prepare their city for an economically more diverse and sustainable future. So in 2010 the city applied for and received a $333,000 grant from EDA to develop a recovery plan for both the NUMMI site and an area surrounding a future BART station.

The Fremont recovery strategy, which was completed in February 2012, focuses on the reuse and revitalization of the 850-acre industrial site, including the 212-acre Tesla plant. It outlines several comprehensive options that Fremont can implement over the coming years to realize a new vision for the area that builds on the city's strengths—such as its excellent rail and highway connections, and its long-standing role as a Bay Area leader in high-technology advanced manufacturing—while leveraging the opportunity to connect itself with the East Bay's outstanding labor force, using the new Warm Springs BART station that is scheduled to open in 2015.

By offering a guide to future land use, public investment, and economic development actions—especially the creation of new jobs—Fremont's recovery blueprint provides an overarching, long-term vision for the region that will ultimately help it to have a diverse, growing, and job-producing economy that is not dependent on a single industry or employer.

Economic development without planning can be a recipe for failure. That is why studies such as this one are a key element of EDA's programs. And for the formerly auto-dependent community of Fremont, the recovery strategy will help guide its growth in ways that will help assure prosperity for years to come.

Our work at EDA is greatly enhanced by the efforts of the Office of Recovery for Auto Communities and Workers, which coordinates the Obama administration's strategy to assist automotive communities affected by the downturn in the automotive industry. We will continue to work together to strengthen the economic ecosystems of auto communities, such as Fremont, in order to create an economy built to last.

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