The auto-parts manufacturing industry, which employs thousands of men and women in northwest Ohio, is facing a grave threat from China, according to two new studies.
The studies by the Economic Policy Institute and by the Washington labor law firm of Stewart and Stewart found that as auto manufacturing zoomed upward, auto-parts manufacturing has not kept pace, and the studies pinpoint Chinese incursion into the parts business as the reason.
Since the deepest point of the recession in 2009, the U.S. auto-parts industry has regained only 60,000 jobs, an increase of 13.8 percent. From 2000 to 2011, the United States lost more than 400,000 direct jobs in auto parts, according to the EPI study, which was released this week.
Michigan and Ohio are the nation's leading auto-parts manufacturing states, with Michigan totaling 249,989 auto-parts-related jobs, or about 6.5 percent of the state's total employment, while Ohio has 189,039 such jobs, or 3.7 percent of the state's total employment.
EPI is a nonprofit, nonpartisan Washington think tank created in 1986. One of its focuses is on "liberal economic policies," according to its Web site, but its primary field of study is the economic conditions of low and middle-income Americans. Its staff includes seven PhD-level economists, with the majority of its funding coming from foundations, 53 percent, and labor unions, 29 percent.
The EPI's report, "Jobs in the U.S. auto parts industry are at risk due to subsidized and unfairly traded Chinese auto parts," by Robert E. Scott and Hilary Wething, says Chinese auto-parts exports increased more than 900 percent from 2000 to 2010, largely because the Chinese central and local governments heavily subsidize that country's auto-parts industry.
According to the report, the Chinese government provided $27.5 billion in subsidies between 2001 and 2010. Many of these subsidies were prohibited by the World Trade Organization. Plus, Chinese auto-parts makers benefit from China's illegal currency manipulation, which reduces the cost of Chinese auto parts by an additional 25 to 30 percent, the studies concluded.
The studies were being trumpeted this week by United Steelworkers President Leo Gerard.
"China is cheating unmercifully in this sector, and we are saying to China -- and asking our government to stand up to China and say -- 'Enough is enough.' It is time to enforce our trade policies," Mr. Gerard said.
President Obama raised the alarm in his State of the Union speech Jan. 24. He said his administration has brought nearly twice as many trade cases against China as the Bush administration did. And he announced creation of a Trade Enforcement Unit.
The concern is not a new one, and it's one that crosses party lines, although the voices in support of organized labor tend to be the loudest.
In December, Ohio Sens. Rob Portman (R.) and Sherrod Brown (D.) sent a letter to the Obama Administration saying that new Chinese tariffs on American automobile imports "are completely unwarranted and unjustified" and hurt Ohio manufacturers.
"Since the U.S. established permanent normal trade relations with China and China joined the World Trade Organization in 2001, the United States' deficit with China on auto-parts trade has increased nearly tenfold, from $1.03 billion in 2001 to $9.95 billion in 2011," Senator Brown said.
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