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Blog Category: Auto industry

EDA Helps Ohio Auto Community Build a New Future

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Guest blog post by Matt Erskine, Acting Assistant Secretary of Commerce for Economic Development

Economic recovery in the wake of an economic disaster—such as the closing of a large employer—doesn’t happen overnight. It requires careful planning, the coordination of human and financial resources, and a willingness to consider alternative directions that will benefit the community in the long run.

This is the story that the city of Moraine, Ohio, can tell. For nearly 90 years, Moraine—located in close proximity to Dayton, Ohio—was the location of a single, prominent manufacturing plant whose successive owners read like an honor roll of 20th century American business: Dayton-Wright Airplane (manufacturer of DeHavilland aircraft), Frigidaire (maker of an iconic line of refrigerators), and, since 1981, General Motors (GM).

When GM announced plans in June 2008 to close this plant, the development came as a blow to the local economy. Just think about the impact to suppliers and the distributors that get their business from them.  According to a report published by the International Economic Development Council, the Moraine region, with more than 90 GM suppliers in 14 surrounding communities, lost more than 800 jobs at larger suppliers in addition to the 4,200 jobs that were lost when GM shut down.

Within weeks of GM’s announcement, staff from the Chicago regional office of the U.S. Department of Commerce’s Economic Development Administration (EDA) began working with state and local officials in Ohio to develop a strategy to deal with the effects of the Moraine plant closure. As a first step, an EDA investment helped the city develop a bottom-up Comprehensive Economic Development Strategy (CEDS) to guide the region’s recovery efforts.

The Road to Revitalizing Anderson, Indiana’s Auto Sector

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Guest blog post by Thomas Guevara, Deputy Assistant Secretary of Commerce for Economic Development and a native of Indiana

As auto communities across the country work to strengthen and redefine their economies, the Obama administration is making good on the President’s commitment to invest in American innovation and advanced manufacturing to spur growth.

In my home state of Indiana, the city of Anderson, located about 25 miles northeast of Indianapolis, was once home to one of the greatest concentrations (after Flint, Michigan) of General Motors facilities in the United States. Today, not a single one of those plants is in operation.

While this is a significant challenge, there is also opportunity. That was the focus of the Auto Community Revitalization Roundtable at the Flagship Enterprise Center that I recently attended in Anderson: to hear from communities affected by the loss of manufacturing jobs, offer practical tools, share available resources, and explore solutions for auto communities in Indiana that are on the road to revitalization. The forum was organized by the Manufacturing Alliance of Communities, the Obama administration’s Office of Recovery for Auto Communities and Workers, and the RACER Trust, which was established to clean up and redevelop closed General Motors sites.

The road to revitalization requires a change of mindset. Rather than think of the abandoned facilities and their accompanying infrastructure as a disadvantage, cities such as Anderson are finding ways to repurpose these assets for future economic growth. The built industrial environment—including manufacturing plants, warehouses, road and rail links, etc.—can be refashioned and reused to suit the needs of newer, growing industries to replace the industries that departed. These industries are not the traditional manufacturers that employed our parents, but rather are modern advanced manufacturing sites that are leading the way in global competitiveness and attracting foreign direct investment.

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

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.

Secretary Bryson Stops by the Motor City

Bryson and Ford chat

Earlier this week, Secretary and former CEO John Bryson made his first trip to Detroit, as Commerce Secretary, where he met with representatives from nearly every major auto maker that produces cars in the United States. In addition, Bryson met with United Auto Workers (UAW) President Bob King, Michigan Governor Rick Snyder, Detroit Mayor Dave Bing, as well as members of the Michigan Congressional delegation. The trip came on the heels of President Obama’s announcement late last year naming Secretary Bryson as co-chair of the White House Office of Manufacturing Policy.

Secretary Bryson’s day-long trip began with a breakfast meeting with members of the Michigan Congressional delegation including Senator Debbie Stabenow, Representatives John Dingell, John Conyers and Hansen Clarke. The group discussed a wide variety of topics including what the Federal government can do to further support the Nation’s manufacturing sector and automotive industry.

Secretary Bryson reiterated that the Department of Commerce is focused on doing everything possible to help support manufacturers. He also talked about the various services at the Commerce Department that are available everyday to manufacturers large and small. For example, the Commerce Department’s International Trade Administration helps promote the U.S. auto industry through trade missions, trade shows and buying missions in addition to conducting market research and business matchmaking to U.S. exporters, particularly to new-to-export and new-to-market automotive suppliers.

Following the breakfast meeting, Secretary Bryson hit the auto show floor and first met with GM CEO Dan Akerson at the Cadillac exhibit.  Mr. Akerson showed Secretary Bryson and members of the Michigan Congressional delegation the newest Cadillac CTS.  After that, the group walked over to the 2013 Chevy Malibu exhibit where Mr. Akerson showed the group Chevy’s newest midsized sedan.  They also ran into Detroit Mayor Dave Bing who was also checking out the latest GM vehicles.

Secretary Bryson then visited with Chrysler/Fiat CEO Sergio Marchionne and saw the new Dodge Dart.  Both Secretary Bryson and Senator Stabenow took turns in the driver’s seat while Mr. Marchionne pointed out the features of the Chrysler’s newest compact sedan.

Secretary Bryson’s final stop on the floor was with Ford Chairman Bill Ford, where he saw the new 2013 Ford Fusion, which will include three engine options, including a hybrid and a plug-in hybrid version.  The Ford Chairman also showed the Secretary the new Lincoln MKS, before the pair ran into Michigan Governor Rick Snyder who was also checking out the newest Fusion.  The three briefly chatted about the importance of manufacturing and the auto industry to the state.

The Secretary then left the show floor to meet with UAW President Bob King.  The two discussed how the Commerce Department can ensure that they are doing everything they can to support American manufacturing so that companies build their products here and sell them everywhere.

The Secretary’s final meeting was with the Global Automakers, a group that represents members of the international automakers community, including companies from Japan, Germany, and other countries around the world.  Secretary Bryson talked about how foreign direct investment in the United States is one of his top priorities, and members of the group discussed the investments they had made to create jobs here at home.

Overall it was a quick, but productive trip to Michigan, where the Secretary met with business, and political leaders, and discussed what more the Department of Commerce can do to support job creation here at home – and saw some great cars.

Brundage Post: Resurgence of the American Auto Industry

Cross post blog by Amy Brundage, White House Deputy Press Secretary for the Economy

Yesterday, the North American International Auto Show kicked off in Detroit, with companies unveiling their new vehicles and folks eager to get their first peek. Transportation Secretary Ray LaHood was on hand for the opening events, and Commerce Secretary John Bryson, Energy Secretary Steven Chu, EPA Administrator Lisa Jackson, and the Labor Department’s Director Office of Recovery for Auto Communities and Workers Jay Williams are all taking part in auto show activities this week.

The auto industry had a strong year in 2011. It’s easy to forget, but just a few years ago many people doubted whether there would even be an American auto industry in 2011.

When President Obama took office, we faced the worst recession since the Great Depression, and the American auto industry was hit hard. Hundreds of thousands of jobs were lost in the auto industry, and entire communities that depended on a dealership or a parts manufacturer were affected.

Both GM and Chrysler faced the stark choice of seeking government support or facing almost certain uncontrolled liquidations, which would have had a ripple effect across the industry, causing at least one million more jobs to be lost. The President refused to let that happen.

In the face of stiff opposition, the president made a tough choice to help provide the auto industry the temporary support it needed to rebuild their companies and get moving again. This was a difficult decision, and came with significant risk. But the president was not willing to walk away from these workers and this great American industry.