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The economy of southern Wisconsin is heavily
reliant on the automotive manufacturing industry.
More than 10,000 1st Congressional
District residents are employed in the manufacture of automobiles and
their parts, working at community linchpins such as the Janesville General
Motors plant, the Kenosha Chrysler engine plant and Delphi Automotive
Systems in Oak Creek. Not only do these employers generate many of the
jobs in our area, but these jobs are extremely well-paying and account for
much of the region's payroll.
The average annual salary for an
individual employed in the automotive industry in Kenosha County is
$83,560, with employment in this sector representing nearly 10% of payroll
wages in the county. Rock County's reliance on the automotive
manufacturing industry is even greater, with almost 20% of payroll wages
represented by these jobs.
As we move ahead in the 21st century, our
nation's auto manufacturing industry is facing two major challenges -
legacy issues and foreign competition. It is essential that we work to
address these problems in order to keep the nation's economy, and the
economy of southern Wisconsin, going strong.
The industry's legacy issues result from
an aging work force. Many workers are at or near retirement. Protecting
employee pension funds and ensuring that they remain fully funded is vital
to retirement security.
However, the collapse of the employee
pension funds of other industry employers, such as the airline industry
and the steel industry, has some wondering whether the auto industry is
next. We must update our pension laws to prevent these catastrophic
mistakes from happening again while making sure that employers, including
the auto industry, are in a strong position to provide the pension and
retirement benefits workers have earned.
Additionally, for the automotive industry
to continue offering its retirees health care, more must be done to curb
the rise in annual health care costs. By moving toward a more
consumer-friendly health care system, we give workers the ability to shop
around for the type of care that fits their needs and budget.
In the individual market, health savings
accounts have saved workers thousands of dollars on their annual health
care premiums. The challenge that we now face is to fully integrate
consumer-friendly reform into the health care plans of the large-employer
market. Employers can find some relief regarding their health care cost
burden by giving their employees the information they need to become more
selective health care consumers.
Another major problem facing our
automotive manufacturers is foreign competition. In the past 20 years, we
have seen our nation's dominance in automobiles eroded by foreign imports,
with the Big Three shedding 600,000 American jobs since 1980.
Today, this threat looms over the
manufacture of light trucks. Production has begun shifting to Japan and
Thailand, while other countries such as China are preparing to enter the
market and could further undercut production costs in the United States.
To address this challenge, there are two
areas on which we must focus. First, we must ensure that our foreign
competitors are playing by the rules.
We must continue to bring suits against
China and others in the World Trade Organization to prevent them from
taking American jobs and technologies with their anti-competitive
behavior.
Second, we must bring down the cost of
doing business in the United States to prevent American companies from
being forced out of business by low-cost competition or relocating to
markets where they can operate at reduced cost.
This requires that we address legacy
issues such as pensions and health care costs, lower our corporate tax
burden, which is the second highest in the modernized world, and bring
down energy costs by reducing our dependence on foreign sources of
petroleum.
Furthermore, we must modify outmoded and
ineffective industry regulations that harm American companies.
One problem is that the CAFE standards
require manufacturers to average the fuel economy of their entire fleet of
light trucks and do not take into consideration the overall makeup of the
fleet, which varies widely between large and small trucks.
This gives foreign companies that
specialize in the production of smaller trucks a significant advantage.
Instead of focusing on the entire fleet,
fuel efficiency requirements should be tailored to each individual vehicle
class. The National Highway Traffic Safety Administration has recently
proposed upgrading fuel economy standards along these lines, and I am
carefully reviewing this proposal to make sure it is in the best interest
of our environment and economy.
In addition to reforming CAFE, we should
encourage our automotive manufacturers to continue making strides in the
research and development of trucks and automobiles that are powered by
alternative sources of energy.
In the awful aftermath of Hurricane
Katrina, we see more clearly than ever how crucial this is.
American automakers have begun to take
the lead in responding to high gas prices and rising consumer demand for
alternative-fuel vehicles with the production of automobiles and trucks
that run on ethanol, electricity, hydrogen and natural gas.
The Big Three are also participating in
Clean Cities, a Department of Energy program that is designed to encourage
the use of alternative-fuel vehicles and decrease our dependence on
petroleum.
I applaud the industry's effort in moving
toward clean, alternative technologies.
We must continue to take this path of
energy independence and efficiency while improving the conditions of doing
business in the United States so that our auto manufacturers can remain
the driving force behind our economy.
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