September 4, 2019 3:06pm
Automakers and labor partners must continue working together for the benefit of Louisville’s economy
Recent news reports about the beginning of UAW-Ford contract negotiations got me thinking about how important auto manufacturing is to our state and to our region. With 95,000 employees, Kentucky ranks an impressive third in auto industry-related employment as a percent of total state employment.
Ford alone employs more than 12,500 workers at its two Louisville area plants and plays a significant role in our local economy. Between the labor negotiations and U.S. trade negotiations, there is a lot at stake for Ford and other automakers in the coming months.
We barely averted new tariffs with Mexico that would have been costly to consumers while placing new burdens on manufacturers. Meanwhile, the trade battle against China drags on. The USMCA has not yet been ratified by Congress, providing a heighted level of uncertainty for those businesses trying to plan future capital investments – and those future investments are what provide job security to the employees at the Ford facilities in Louisville. We are not immune to these global forces locally and need strong leadership from all area stakeholders to ensure our economy remains vibrant.
American auto manufacturers no longer compete just amongst themselves. They face stiff competition from foreign manufacturers, as well as new auto companies in the U.S. that are snapping at their heels. In addition, new technologies are fueling growth of self-driving and electrified vehicles, which are forcing traditional manufacturers to make significant investments in future technology.
It’s easy to think our local auto plants can withstand these changes in the economic landscape unscathed. But just look to our neighbors in Ohio and Michigan who found out in last year that their General Motors plants were unexpectedly shutting down. Even Ford – which announced earlier this year that it is laying off salaried employees, closing five plants in Europe and selling another – is susceptible to the challenges facing U.S. automakers. I can’t imagine a Louisville that doesn’t include Ford and don’t want to think about what the loss of those jobs would mean to our community.
Since the opening of the Louisville Assembly Plant in 1955 and the Kentucky Truck Plant in 1969, Ford has been an integral part of the Louisville landscape. Today, these two major assembly plants employ more than 12,500 people from our region. That number expands exponentially when you consider the multiplier effect that auto manufacturing jobs create. According to the non-partisan Center for Automotive Research in Ann Arbor, Mich., each auto manufacturing job translates to seven additional jobs in the community.
An example of this could be a local factory purchasing goods and services from a local business. Workers for those suppliers then spend money at local businesses, who then hire more people to meet that need. All of this generates local taxes that pay for our firefighters and teachers, not to mention the community involvement and charitable giving that comes from the plants and their workers.
It’s clear the Louisville area and the Commonwealth of Kentucky depend heavily on a strong auto industry. We need strong pro-manufacturing policies across all levels of government. That is why Greater Louisville Inc. continues to encourage stakeholders across the industry to drive development for mutual success. New labor agreements that allow domestic automakers to remain competitive with their foreign counterparts are also essential to meeting that goal. In this case, that means that the automakers and their labor partners must continue working together to adopt labor practices that are competitive and allow companies to regain their financial footing, while providing meaningful benefits for employees.
The very well-being of our community’s economy depends on it.
–Kent Oyler leads Greater Louisville Inc. – the Louisville area bi-state regional chamber of commerce representing Bullitt, Clark, Floyd, Hardin, Harrison, Henry, Jefferson, Meade, Nelson, Oldham, Scott, Shelby, Spencer, Trimble and Washington counties.