Economist: Industry won't likely recover to pre-recession levels
A Ford Motor Co. vice president says the auto industry is on the rebound.
"Manufacturing is back," Ziad S. Ojakli said earlier this month at a Detroit Regional Chamber of Commerce event, according to a story on MLive.
Though the jobs numbers are lower than they were a decade ago, the trend is upward, which economists say is encouraging.
There were 282,400 auto manufacturing jobs in the state in January 2003. That number dropped to 114,400 in July 2009. In November, there were 169,600 auto manufacturing jobs in the state, a 48 percent increase from July 2009.
Auto manufacturing jobs include auto and auto supply manufacturing jobs, which includes people who assemble vehicles, those who work at the parts plants and people who make parts sold at auto suppliers.
"This is an industry that if you look at the trends and asked me in 2005, it was in danger of dissolving in Michigan," said James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy. "That hasn't happened. In fact, it has had a robust recovery."
University of Michigan economist Don Grimes said one of the contributing factors for job growth in motor vehicle manufacturing is that labor costs have been declining.
Grimes said the hourly wage for production workers adjusted for inflation, excluding overtime, in motor vehicles and parts manufacturing in the U.S. has declined from $26.83 in November 2002 (in 2013 dollars) to $20.35 in November 2013.
"Auto manufacturing is now a much leaner and meaner industry, which has allowed it to recover," Grimes said.
Grimes said employment in the auto industry and manufacturing are still well below pre-recession levels.
"I don't think we will ever get there," Grimes said.
He said how Michigan fares in the future will depend on growth in other industries.
The auto manufacturing industry's 169,600 jobs were 4.1 percent of the state's 4.09 million jobs as of November 2013.