FENTON, MI (July 7, 2011)—A white paper from the Michigan-based Defour Group finds that a significant number of auto sector jobs would be lost if the federal government’s proposed fuel economy mandates for Model Year (MY) 2017-2025 vehicles were implemented. Federal regulators, currently meeting with automakers behind closed doors, are considering increasing the standards to as high as 56 mpg to 62 mpg over that time period.
Dean Drake, the paper’s author, confirmed a U.S. Energy Information Administration estimate that automakers would sell 2.4 million (approximately 14 percent) fewer new vehicles if standards are set to hit 62 mpg by 2025.
“Clearly, sales losses of this magnitude could be expected to lead to job losses in the industry,” Drake said.
Drake bases the study’s job loss numbers on the National Highway Transportation Safety Administration (NHTSA) analysis of the 2012-2016 MY CAFE standard that said that one job would be lost by the OEMs and their suppliers for every 11.3 new vehicle sales which fail to sell. The study also calculates dealerships job losses as a result of fewer new car and truck purchases.
PROPOSED TARGET (MY17-25) LOST SALES LOST JOBS (OEM, Supplier, Dealership)
62 mpg (6% per year) 2.4 million 293,100
56 mpg (5% per year) 1.9 million 220,000
“These projected job losses will NOT be offset by the development of new technologies creating so called ‘green jobs’ as many contend,” Drake added. “The advanced technology vehicles such as electrics will only make up a small part of the new vehicle fleet. Plus there is no guarantee that these new jobs would stay in the United States.”
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