U.S. auto industry is vital to the economy

By THOMAS M. HUMPHRIES

For more than 100 years, General Motors has played an instrumental role in America’s manufacturing history, and in our Valley the company has employed thousands and produced quality vehicles for more than 40 years. GM and its suppliers have seen the highs and lows of the economy, witnessed the vast transformation of the auto industry and know the consumer better than most. However, the current financial crisis has hit GM hard enough to make this century-old institution join other Detroit automakers in seeking bridge loans from the federal government.

Immediate action needed

It’s not just GM that is facing an uncertain future. The entire domestic auto industry stands to crumble if immediate action and swift resolution don’t come to pass. The Big Three — General Motors, Chrysler and Ford — are not asking for a bailout or a free pass. Instead, they are requesting a federal loan to help retool their factories and create advanced propulsion technology. This loan needs to be a secured federal loan that not only helps support our domestic automotive manufacturers, but also helps support supply chain vendors to these automakers.

The Mahoning Valley region alone is home to countless auto parts suppliers that rely heavily on the industry’s global stability. Ensuring support of these supply chain companies to GM is crucial to the manufacturing industry in the region. Additionally, there are thousands of GM retirees in the region who are an integral part of our economy and are sincerely reliant on the constancy of our automakers’ economic picture.

To domestic automakers’ credit, they’re not expecting the government to make these changes for them — internally, the companies are revamping their costs across the board. GM, for example, recently took additional actions to reduce salaried employment costs by 20 percent and drop raises and discretionary bonuses for executives and management. Last year, the company reached an historic agreement with the United Auto Workers union to transfer responsibility for delivering healthcare benefits to GM workers and their families, resulting in GM’s healthcare liability being reduced significantly.

Locally, our GM Lordstown Complex has made great strides, as the Harbour Report named the plant the 7th most productive automotive facility in North America in 2008 — based on productivity and the number of hours it takes to make a vehicle. (In 2006, it ranked 23rd; in 2007, 9th.) We know we have one of the most focused, hardworking groups of men and women anywhere right here at our Lordstown plant.

Even with such changes and efficiencies, however, financial assistance in the form of a secured loan still must be seriously considered by Congress for the entire domestic auto industry.

Keeping ahead of the game

In this time of financial hardship, America needs to remain on the forefront of manufacturing, job creation and innovation. I encourage Americans to support the initiative to provide a secured federal loan to make the domestic auto industry a more competitive, cost-saving and progressive institution.

The Mahoning Valley is one of countless communities that would be forever changed if the domestic auto industry is permitted to fail. Federal aid can come at no better time, to help an industry that has supported jobs, revenue and pride in the Mahoning Valley region — and across the nation — for years.

X Humphries is president and CEO of the Regional Chamber, which serves the Mahoning Valley.