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GM, Smaller After Rescue, Still Contributor to Economy, CAR Says

Bill Koenig
By Bill Koenig Senior Editor, SME Media

General Motors Co., shrunken after a 2009 U.S. bailout, still provides a boost to the U.S. economy, the Center for Automotive Research said in a report.

Detroit-based GM “is a significant contributor to the U.S. economy and the economies of the nine states in which GM has manufacturing facilities,” CAR, Ann Arbor, Mich., said in the report.

The report by CAR researchers is based on 2019 statistics. GM’s U.S. employment was 83,860 jobs. CAR estimated for each GM job, another 7.1 jobs were supported by the automaker in the form of supplier jobs and other GM-dependent work. In 2019, some GM suppliers implemented temporary layoffs because of a 40-day strike at the automaker by the United Auto Workers union.

GM built about 1.7 million light vehicles last year in the U.S., second behind Ford Motor Co.’s 2.2 million. Almost 90 percent of the vehicles GM assembles in the country are sold in the U.S. CAR estimated that GM has announced investments of $44.3 billion in U.S. factories since 2000. Plant expansions and retooling account for 87 percent of that total.

The company’s U.S. operations support “jobs in nearly every sector of the U.S. economy,” including professional and technical services and construction, CAR said in the report.  

However, the report also provides an idea of how GM has retrenched over the past two generations.

Since the mid-1980s, GM’s manufacturing base has contracted as the company shut down operations, withdrawing from states such as California, Georgia, Wisconsin and Massachusetts.

The automaker’s manufacturing footprint also has shrunk in states that retained GM factories. For example, according to CAR, GM employed 6,819 people directly in Indiana last year.

In the mid-1980s, the company employed about 50,000 in that state. Plants were closed, were included in companies spun off from GM or simply sold to other corporations. Similar events took place in other states where GM still operates.

GM, at times, struggled against Asian-based competitors such as Toyota Motor Corp. and Honda Motor Co. Its problems came to a head with the 2009 U.S.-backed bankruptcy that resulted in more closures and the end of some vehicle brands. Ford passed GM for the lead in U.S. vehicle production in 2009.

Despite that, “GM’s estimated employment contribution is equivalent to 0.39 percent of total U.S. private sector employment and 0.46 percent of total U.S. private compensation,” according to CAR.

“The fact that the compensation share is larger than the employment share implies that GM employees earn higher compensation on average than do U.S. workers on average.”

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