Strickland credits auto rescue for Ohio manufacturing gains

With jobs at the center of the presidential race, Democrats tout the revival of the American auto industry as a prime success story of the Obama administration. Former Democratic Ohio governor, Ted Strickland, made that connection when he appeared on Meet the Press last month.  

Strickland said unemployment in Ohio was below the national average and his state had "created 45,000 new manufacturing jobs since 2010. And that's due in large part to the fact that the auto rescue has helped Ohio."

We have examined the resurgence of the Ohio auto industry before. Republican Gov. John Kasich downplayed its impact on the state’s overall economy. We rated that Mostly True. Strickland is giving the auto bailout particular credit for growth in the manufacturing sector and that specific connection is one that we look into now.

According to the Bureau of Labor Statistics, Strickland has it right for the number of manufacturing jobs in Ohio. They went up by about 47,000 between the start of 2010 and the middle of 2012.

Where he gets into trouble is proving that a large part of the job growth is due to the automotive sector. Jobs in building cars and making the parts that go into cars did go up, but only by a bit over 5,000, or 12 percent of the total increase. That’s not a small fraction, but it doesn’t seem to qualify as a "large part."

We contacted Strickland’s colleagues at the Ohio Democratic Party for supporting details and they did not provide any.

However, the direct job figures don’t tell the whole story. The supply chain that feeds into a finished car is long and complicated. The BLS tracks the car parts industry, but it doesn’t track the other manufacturing jobs that supply auto parts makers. An analysis by the Center for Automotive Research, an independent group that gets some support from the auto industry, found that the number of jobs in metals, plastics and rubber that are tied to auto parts makers is about half again larger than the number of jobs in the auto parts sector itself.

It is very difficult to know how this ripple effect plays out in Ohio itself.

"The problem is we have these artificial boundaries called state borders," said Kim Hill, associate research director at the Center. "An assembly plant in Michigan can produce jobs at a Mom and Pop tool and die maker in Ohio and vice versa." Hill says often, the small firms themselves aren't aware of the connection.

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Nissan just announced 9,000 layoffs in Tennessee “to avoid severe losses due to expected tariffs.”

James Rubenstein, a professor at Miami University, has drilled into the complex connections among manufacturers in the car business.

"A very high percentage of steel produced in Ohio goes to the auto industry," Rubenstein said. And he added, the pattern would carry through for all primary metals, machine shops and other fabricators.

The larger the fraction of steel, for example, that went to cars, the larger the number of jobs attributable to the industry. Some of those downstream companies could be selling to car makers and car part suppliers in other states. The revival of the car industry was not limited to Ohio. It also took hold in places such as Michigan, Indiana, and Pennsylvania. Increased activity there could produce jobs in Ohio.

As a final complication, Strickland tied the auto industry to manufacturing in general. At some level, when people have jobs, they buy some big ticket items such as washing machines and refrigerators. Those purchases also would generate manufacturing jobs.

The problem is, we could find no clear tally of all of these possible effects.

Based on the numbers we can find for manufacturing jobs that feed into the supply chain of auto parts, we might take the figure from the Center for Automotive Research and say that  those jobs might account for another 4,000 manufacturing workers in Ohio due to the auto industry.

If one counted all of those jobs, that would still translate into only about 20 percent of the manufacturing jobs added in the state.

Our Ruling

Strickland said that Ohio "created 45,000 new manufacturing jobs since 2010. And that's due in large part to the fact that the auto rescue has helped Ohio."

Strickland is right on the big number. Giving major credit to the auto industry is a harder case to make. Based on the information gathered by the BLS, the automobile sector accounted for just one-eighth of the new manufacturing jobs. There are good reasons to believe that the impact of the auto industry, both within and outside of Ohio, generated a larger impact on manufacturing jobs, but it is difficult to quantify.

We rate the statement Half True.