The changing landscape of the auto industry

Marketplace Staff May 18, 2011
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The changing landscape of the auto industry

Marketplace Staff May 18, 2011
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Steve Chiotakis: A consulting firm says U.S. auto sales are likely to rebound to pre-recession levels by 2013. The news comes as GM says it’s investing more than a $100 million at a couple of plants in Michigan, which’ll keep or create a bunch of jobs. But a study out this month says carmaking has changed in the Midwest even before the recession got a hold of it.

Jerry Conover is director of the Indiana Business Research Center at the Kelley School of Business, which — full disclosure — is one of this program’s underwriters. Good morning.

Jerry Conover: Good morning Steve.

Chiotakis: Talk about your study, and the future of the auto industry, in the Midwest particularly.

Conover: For the past decade, more than half of the jobs in the auto sector in the Midwest disappeared, and that was even before the recession. So we looked at things like changes in vehicle technology, advanced powertrains, lightweight materials. And the nature of these changes, we determined, leads to a shift in the kinds of jobs that are available now and are likely to be available in the future for workers in the auto sector. A lot of the jobs going down the road are going to need more advanced training than was typical in the past.

Chiotakis: I know historically a lot of people went from high school into the auto sector and this was a step into the middle class for a lot of these workers, but now, as you say with more education and more skills necessary, has that path, you think, disappeared?

Conover: I think the fairly easy path of completing high school and going right into a factory job with high pay and strong benefits has pretty much faded from the landscape. There aren’t many of those opportunities left.

Chiotakis: The report says that this is a reality check for the regional economy. What do you mean by that?

Conover: The three states that collaborated on this project were Michigan, Ohio and Indiana. About half of all the nation’s production in the automobile industry is concentrated in these three states. And as a result, the automotive sector really pushes the region up or down with the fate of the industry. So we understand that the industry is changing, there will likely not be anywhere close to the number of jobs in the future as there have been in the past, and that’s what we set out to try to understand more.

Chiotakis: Jerry Conover from Indiana University. Jerry, thank you.

Conover: You’re welcome, Steve.

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