Report | Budget, Taxes, and Public Investment

Invest in America: Essential policies needed to secure U.S. jobs in the auto industry

Briefing Paper #233

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The trend is clear: more and more of “Big Three” auto production is taking place in countries other than the United States. Big Three motor vehicle production in Mexico increased in 2008 while it fell 24% in the United States and 25% in Canada. As a result, the Mexican share of total North American production rose between 3 to 4 percentage points for GM, Ford, and Chrysler in 2008. GM has invested $3.6 billion in Mexico in the past three years and is increasing its commitment to Mexican production by having its new Aveo subcompact built there instead of in the United States (Black 2008). And the Big Three plan even greater future investments outside of the United States: GM announced plans to invest $1 billion in Brazil (Ortolani 2008), and Chrysler is investing $570 million in a new engine factory near Saltillo in the Mexican state of Coahuila. At the same time, GM and Chrysler are seeking nearly $22 billion in additional restructuring aid from the Obama administration. Taken together, these facts make an “Invest in America” requirement an essential component of any further government assistance for U.S. auto companies.

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