Some 400,000 Chicagoans are employed by manufacturers, including Ford’s Chicago Assembly and Chicago Stamping pants. These plants employ nearly 6,000 people in good-paying manufacturing jobs, producing Explorers, Police Interceptors and Lincoln Aviators for shipment all over the world. The future of manufacturing cannot afford roadblocks. Chicago recently passed one of the most expansive scheduling ordinances in the country. We are committed to working with our elected leaders to increase job creation and retention, but we can’t do it if business’ hands are tied.
Ford announced in February a $1 billion investment in our Chicago plants that would add 500 jobs. Last month, Ford invested another $50 million and added 450 more jobs at Chicago Assembly Plant.
But the auto industry has a long history of volatility. Its near-death is barely a decade old and trade tensions pose a threat not seen in decades. The non-partisan Center for Automotive Research estimates U.S. consumers will pay $3,000 to $4,000 more per auto because of trade conflicts and higher tariffs on imported parts. Higher prices, of course, mean fewer sales.
And that is exactly what is happening. U.S. industry auto sales declined 2.8 percent in the first half of 2019, despite a strong economy. Auto analyst group J.D. Power predicts auto sales will fall to their lowest level in four years.
The auto industry is changing. Autonomous and electrified vehicles will mean great expense for automakers to retool plants. While the country just barely escaped a trade war with Mexico, trade conflicts with China continue. It would be nice to think our Chicago plants are immune from these forces. It’s tempting, too, to imagine that a plant that’s been making cars in Chicago for nearly 100 years could never go away.
But these plants are not islands. Steel and aluminum tariffs are already costing U.S. automakers billions, and regardless of what happens on other matters, the tariffs of 25 percent on steel and 10 percent on aluminum represent a significant burden for automakers.
Nearly 6,000 Chicago autoworkers at Ford only begin to show Ford’s economic impact on the state’s economy. The company makes more than $2 billion in annual purchases here related to its manufacturing facilities. And don’t forget the millions in philanthropic donations and state and local taxes paid.
But the biggest impact is what is known as the “multiplier effect” — the number of jobs an industry creates just by being there. For example, a factory buys goods and services from local suppliers; its workers spend at shops, restaurants and movie theaters. Those businesses, in turn, employ people. They all pay taxes that help hire teachers, first responders and so on.
Manufacturing has a higher multiplier effect than other sectors. According to CAR, auto jobs have a multiplier effect of seven, meaning every auto manufacturing job creates seven additional jobs. Imagine what would happen to the economy on Chicago’s south side if those jobs went away.
These plants matter a great deal to our region’s economy. Let’s celebrate that legacy but be ready for the future. In an increasingly competitive world, we remind our elected officials and business and civic leaders to be mindful of how we can better support our manufacturers.
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