US clings to auto manufacturing
The auto industry is nothing if not cyclical. The past several years have been spent on the brighter side, with auto plants across the country reaching 211,000 workers, up 55 percent since the recession and the rescue driven by the federal government. Now the momentum is slowing, June the sixth consecutive month of declining sales.
The expectation is that annual sales will fall below 17 million for the first time since 2014. Ford has announced plans to generate cost savings, including as many as 20,000 layoffs worldwide. General Motors has shut down production lines. Fiat Chrysler has trimmed its work force.
As Mark Muro of the Brookings Institution explains in a recent post, this turn comes at a time when the auto industry plays an especially crucial role in the state of manufacturing. He points out that the auto sector has delivered about 40 percent of the country’s manufacturing employment gains during the past two years. Narrow the scope to the past 15 months, and the share climbs to 80 percent.
Which manufacturers will pick up the slack? That isn’t clear, Muro adding that in 39 of the largest 100 metropolitan areas, manufacturing growth has turned negative since the start of 2016.
With the Trump White House looking to re-negotiate the North American Free Trade Agreement, a bit of caution is due: The improved auto supply lines resulting from the accord have made the industry as a whole more competitive globally.
Volvo drives future of electric automobiles
Progress in electric car development was steady — a new Tesla here, a Chevy Bolt there. Until, like a thunderclap, came news that portends the eventual phaseout of traditional gas-powered engines: Volvo announced that every new model it will launch from 2019 onward will be either allelectric or a hybrid.
No vrooms and fumes? Get used to the idea.
The actual disappearance of traditional engines from Volvo showrooms should arrive in the mid-2020s, once customer interest in older gas models dries up. That commitment puts Volvo at the leading edge of a dizzying trend for manufacturers, the oil industry, the environment, drivers and the culture at large.
A look at global manufacturing plans shows the industry is going all-out. Business Insider says about a dozen companies, including Mercedes, Audi, Jaguar and Ford, will introduce electric SUVs by 2020. Volvo, owned by a Chinese company, plans to launch five fully electric cars between 2019 and 2021. “This announcement marks the end of the solely combustion engine-powered car,” Hakan Samuelsson, Volvo’s CEO said a few days ago.
European-based automakers are driving hard to introduce electric vehicles to comply with stringent new rules on carbon emissions. France says it wants to end the sale of gas and dieselpowered cars by 2040. The same type of political pressure exists in the U.S., where the Obama administration instituted stricter fuel-economy standards.
The biggest breakthrough is in battery power: The Bolt can go 238 miles without a recharge. That eliminates range anxiety — fear of running out of juice on the highway.
At some point, self-driving vehicles controlled by artificial intelligence will grab the wheel from humans. Like them or not, autonomous vehicles will be safer and more efficient.