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Obama's Green Car Plan Is a Job Creator (or Not)

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A few thoughts on jobs. I’m lucky enough not to really have one. Instead of driving to my cubicle at Consolidated Interglom, I walk upstairs and write stuff at the computer. I’m lucky. Am I one of those happy folks who owes his job to the greening of the auto industry? I’d probably say yes, since I’d be unemployable otherwise. But I’m not sure I’m being counted along with the factory line workers making Volts and Leafs.

On the line at Nissan in Tennessee: It's all about the jobs. (Jim Motavalli photo)Just asking, because the whole green jobs thing has been coming up a lot lately. We’re in the election year silly season, and high unemployment is on everybody’s minds. No wonder stats on job creation get tacked onto nearly every proposal.
 
This week, the Obama Administration finalized the Corporate Average Fuel Economy (CAFE) program for 2017-2025. By the end of that program, auto fleets will be averaging an impressive 54.5 mpg. The skies will be cleaner, and six billion tons of carbon dioxide abated, officials said.

Personally, I do think that CAFE, and the similar California Air Resources Board mandates (which actually require automakers to deliver electrics) will create a fair number of jobs, but it’s pretty difficult to put specific numbers to them. The green car sales are too foggy at this point. Remember, unless we actually require people to buy the shiny electrics and hybrids in the showroom, their sales numbers (and thus their effect on the economy) are kind of speculative.

At the press event announcing a finalized CAFE, Transportation Secretary Ray LaHood and EPA chief Lisa Jackson said the legislation will stimulate the economy and create jobs. Lots of jobs.

With Obama’s help, the auto industry “added 250,000 new jobs since June of 2009,” said Jackson, who no doubt had the bailout of General Motors and Chrysler in mind. LaHood added, “[CAFE] will help American families keep more of their hard-earned paychecks into their pockets and spend less at the pump while still preserving the features and vehicle choices consumers want….At the same time, these new standards will promote innovation and lead to new technologies. And that means even more consumer choices, new jobs, and even new industries.”

Mitt Romney, for his part, sees green jobs as a myth. He said that CAFE standards are “extreme” and “hurt domestic automakers and provide a benefit to some of the foreign automakers.” He’s also said that electric cars are “a technology that people aren’t interested in,” and that he’d work to repeal CAFE if elected. Romney’s new energy plan doesn’t mention fuel economy as a way to reduce our overseas oil dependence, but it does talk a lot about jobs.

If turned into law, the plan, which is heavily weighted to increasing oil and gas drilling, would be the catalyst for “creating millions of new jobs from coast to coast,” it said. The numbers get specific: more than three million new jobs, including one million in manufacturing. Wow, that’s a lot of jobs! Some of the jobs cited are ones we’ve lost, like the 10,000 positions shed in the wind industry “as companies like Solyndra were going bankrupt...”

GM is churning out Volts, but is idling the plant for a few weeks. No one can accurately estimate future demand--or the factory jobs the car will create. (GM photo)Not to be outdone, the green groups are talking about a lot of jobs, too, with CAFE making it possible. The Consumer Federation of America says,Over the life of the vehicle, higher fuel economy puts thousands of dollars into consumers’ pockets, which will boost the economy and stimulate job growth.”

Phyllis Cuttino, director of Pew’s Clean Energy Program, says “up to 570,000 new jobs could be created” in the auto industry with CAFE in place. Sustainable investment group Ceres says in a new “Jobs per Gallon” report that CAFE will drive investment and innovation, “creating 484,000 new jobs in the U.S. economy wide.” Only 43,000 of them would be direct auto employment, though.

Ceres actually locates some of the jobs:
  • Ford has doubled the size of its clean cars team to 1,000 engineers and technicians, and plans to double again by 2015. It’s bringing design and production of hybrid and electrics in-house, investing $135 million.
  • Honda is hiring 300 workers at the Indiana plant that makes the Civic Hybrid.
  • Volkswagen’s adding a swing shift to its state-of-the-art green plant in Chattanooga, Tennessee, which makes the fuel-sipping Passat.
Frances Beinecke, president of the Natural Resources Defense Council is a bit more modest. The standards, she said, “will spur the creation of thousands of new jobs, as well as state-of-the-art vehicles that go nearly twice as far on the same gallon of gas.” Michelle Robinson of the Union of Concerned Scientists says simply that CAFE will “create new jobs in the American auto industry and around the nation.”

If consumers save $8,000 in fuel costs over the life of a 2025 vehicle, as Jackson and LaHood said, they certainly will have more money in their pockets, the economy will be stimulated, and employers will be hiring again. Win-win, since we’ve also cut fuel imports and reduced greenhouse gas. But it’s a big if, and in the interests of bipartisanship let me add that it’s highly disputed by the other side.

“The president tells voters that his regulations will save them thousands of dollars at the pump, but always forgets to mention that the savings will be wiped out by having to pay thousands of dollars more upfront for unproven technology that they may not even want,” says Romney’s Andrea Saul. Of course LaHood and Jackson dispute that, saying the added green car costs will be only $1,800.

We could go on, tit for tat, but let’s end it here. It’s quitting time, so I have to walk downstairs. Let’s just say that nobody knows the real job creation numbers from any specific program, except possibly Nostradamus, and he isn’t talking just now.
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