April 16, 2014

Strickland Makes Right Call on Importance of Auto Industry Supply Chain

Yesterday, Gov. Ted Strickland looked great and sounded all the right themes on CBS’ Face the Nation.  Of all the governors on the panel, he was the only one to say anything remotely newsworthy.  In Ohio and Michigan we understand the U.S. auto manufacturing is not only the Big Three, it’s the quarter of a million Americans working making parts and supplies for GM, Ford and Chrysler.  In Ohio, the number of people employed in the auto parts industry alone is over 97,000. (MEMA)

In answering questions regarding what are the largest problems in Ohio, Strickland told CBS’ Bob Schieffer that unemployment and foreclosures were huge issues, and continued about the importance of the auto industry – domestically and foreign-owned:

SCHIEFFER: What if one of the auto companies goes under?  How will that impact out in your state?

STRICKLAND: Hugely — hugely. And it will not only impact the Big Three; it will impact all auto
companies, including Honda and Toyota and all the others, because they have the same supply network.
And this supply chain is very fragile, and if it starts to collapse, it could have a cascading effect that could, quite frankly, cripple an industry that has been so vital to the economy of our entire nation for so long. So it’s very important that the auto industry get the help it needs to survive.

And I’ve had officials from the Honda corporation come to me, say to me, Governor, we’re not usually in
the business of advocating for our competitors, but it is so important that the auto industry and the Big
Three be preserved.

Otherwise, the economy of this country will suffer perhaps irreparable harm, and we just cannot let that
happen.

Governor Strickland’s fears are also dealt with by the Economist in the Feb. 19th edition.  In an article with the subhead, GM and Chrysler Say the Need Help, So Do Their Suppliers, the author says there are three large problems facing President Obama’s new U.S. Auto Industry Task Force, including, “The third is what help should be given to the car-parts industry, which receives far less attention than its famous customers, but which is facing acute problems of its own.”

One of the hallmarks of our current economic crisis is the constant unwinding of problem after problem.  Too many foreclosures turned into failed mortgage backed securities turned into uncapitalized credit default swaps.  In the case of the auto industry, failure of one or more of the Big Three turns into parts suppliers belly up turns into problems for the foreign-owned U.S. car plants.

Comments

  1. Francis says:

    Strickland making the point that it is not only the U.S. Auto industry that is in trouble, but the entire industry foreign and domestic was one the greatest points of his argument and needs to be echoed because it is an example that the global economy is what is at stake. When manufacturing is thriving in Ohio the world economy is thriving!

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