Lessons from the Auto Layoffs

By Masters, Marick F. | St Louis Post-Dispatch (MO), December 21, 2018 | Go to article overview

Lessons from the Auto Layoffs


Masters, Marick F., St Louis Post-Dispatch (MO)


General Motors' announcement of major layoffs and plant closures in North America reminds us of the continual threat of job loss in manufacturing. The U.S., including Missouri, enjoys near historic low unemployment rates, having recovered persistently from the massive downsizing as the auto industry faced collapse. But shifting customer preferences, cyclical economic downturns and disruptive technologies promise future dislocations.

Missouri, which produces more than 750,000 vehicles and employs over 260,000 in advanced manufacturing, needs to prepare workers and businesses to mitigate the adversity of job loss. In the final analysis, however, workforce preparedness is a national problem, requiring national solutions, though state initiatives such as the Missouri Partnership play a vital complementary role.

Given the considerable leeway employers have in making layoffs, the challenge becomes ameliorating any resulting harm. This problem involves two parts. The first is how to facilitate the successful re-entry of dislocated workers into the labor force with minimal financial interruption. The second concerns retooling current workers so they are less susceptible to dismissal because of outdated skills.

Automation and the widely reported skills gap bear directly on the threat of more worker displacement. A 2017 global report released by the McKinsey Global Institute estimates that automation threatens to render at least 30 percent of the content of 60 percent of all occupations obsolete in the not-too-distant future. The resulting displacement could be considerable. At the same time, surveys reveal that employers find a skills deficit within the available workforce. Workers with such deficits become vulnerable to displacement.

Automation will certainly substitute for some occupations and workers. And employers may find it tempting to solve a skills shortage among their current workforce with new hires. This approach gains appeal if dismissing current workers changes a flawed organizational culture or saves money by dismissing more highly compensated employees.

While automation results in some displacement, it also produces new types of work. In addition, it may improve the quality of existing work. Skill shortages will exist as long as the pace of advancement in knowledge and technology outstrips the capacity of educational and training systems to produce a sufficient supply of up-to-date talent.

The solution to the threat posed by automation, however, is not to become a society of Luddites. …

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