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U.S. Automaker Woes Hit the East North Central Region

6 Nov 07

Recent layoffs show a shift of the nation's automobile manufacturing center from North to South.

Additional to layoffs announced earlier this year, the Chrysler Corporation announced further job cuts on October 31 that will be centered in Canada, Michigan, Illinois, and Ohio. These states have been hit especially hard by the declining payrolls of the American automobile industry.

Recently announced layoffs have accelerated the pace that the nation's auto manufacturing center is shifting from northern to southern states. Traditionally, this hub has encompassed Illinois, Indiana, Michigan, and Ohio. Since 2000, however, these states have lost more than 200,000 auto manufacturing jobs, as the southern states—with their lower labor and transportation costs—have added jobs.

The largest of these latest moves are detailed in the table below. Most of the layoffs are in northern states, with Michigan and Ohio at the top. Indeed, Ford's and Chrysler's announced layoffs this year and General Motors' ongoing layoffs announced in 2005 and 2006 have weighed down the economies of these states.

Major Layoffs

Company

Announced

Location

Number of Jobs

Chrysler

February 2007

MI, DE, IL, OH, OR, NC, MO

13,000

Chrysler

October 2007

MI, OH, IL

11,000

Ford

Ongoing from 2006

Mainly MI, OH, IL

30,000

General Motors

Ongoing from 2005

Mainly MI, OH, IL

34,000

    

Major Expansions

Honda

May 2007

IN

2,000

Kia

2006

GA

2,800

Toyota

July 2007

MS

2,000

Toyota

2006

TX

4,000

In contrast, the major expansions announced or implemented over the past few years have occurred mostly in the South, with the Honda plant in Indiana an anomaly. For example, Mississippi used large tax incentives, along with its low labor costs, to attract a Toyota plant in mid-2007.

Detailed layoff and expansion reports for all industries can be found on the state and metro pages of MyInsight.com.

by Michael Nipple

 
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