Driving the Economy

Months before the wheels fell off the big bus, the auto industry was feeling the effects of a souring economy. In late 2007 through 2008, auto industry layoffs were a regular feature in the AIRS News Outplacements report.

Then, trouble in the auto industry was blamed on factors unrelated to the economy: most notably how U.S. automakers' products no longer met customer needs. But, from today's perspective, auto industry woes seem to have been a precursor to the recession. Only the airline industry had more layoffs during that time period, and airline cutbacks were, for the most part, in response to record high fuel costs.

Flash forward to August 2010, as the U.S. begins to emerge from a global recession. It's been slow going, causing some to question whether growth is indeed forthcoming. A major problem, to date, has been that no one industry has led the recovery. Well, that may be changing.

In the past two weeks, there has been a lot of positive news from the auto industry. General Motors is making money, repaying the government, and planning an IPO later this year. Ford and Chrysler are also selling cars. And, perhaps most important, profitability in the auto industry has led to hiring.

The auto industry, which arguably was the first casualty of a prolonged recession, now appears to be driving the economy.