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The Drive to Move South Advances: Automakers Revitalize the
U.S. and Southern Economies
In 2008 and 2009, the American auto industry was in dire shape and the Big Three U.S. automakers—General Motors, Chrysler and Ford—were forced to make wrenching cuts in terms of employees and production. General Motors and Chrysler had no recourse but to secure emergency bailout assistance from the federal government, and consumers and companies faced serious difficulties in securing loans as a result of a credit freeze that was sweeping across the U.S. economy, along with a multiplicity of other challenges. The negative consequences of the Great Recession caused havoc on myriad sectors, and the fabled American auto industry, along with many other components of the U.S. economy, faced a series of grim choices. While there has been a radical but positive transformation in the nation's economic fortunes in the more than six years since the onset of the Great Recession, there still are significant sectors within the U.S. economy that remain weak.
In this context, the fact that the industry has made significant progress since those glum days speaks volumes about the resiliency of the industry and its willingness to make radical changes on a range of issues. Not only are the three U.S. automakers thriving compared to their doleful position in 2008 and 2009, the dozen or so foreign automakers with manufacturing facilities in a number of mostly Southern states continue to perform admirably. Notably, even during the darkest days of the Great Recession, not one of these foreign automakers, operating largely in the South, was forced to dismiss a single employee; even more impressively, a number of these foreign automakers actually expanded their operations during the Great Recession, a development that has indisputably assisted in the nascent resurgence of the American manufacturing sector in recent years.
This SLC Regional Resource is divided into three sections. Section I provides details on broad, national trends on the influence wielded by the nation's automotive sector on gross domestic product, specifically the breakdown of gross output by industry; the contribution of new and used motor vehicles and auto parts to the U.S. economy; and the auto industry's contributions to the nation's employment rolls. Section II provides an array of details on how the industry continues to advance in the SLC states, including details on the many foreign automakers' impressive performance in recent years, even during the most desolate days of the Great Recession. Section III demonstrates the auto sector's sphere of influence around the SLC region reinforcing the mounting importance of the automobile sector and related manufacturing operations.
Clearing the Air: SLC State Responses to the Clean Power Proposed Rule
On June 2, 2014, the U.S. Environmental Protection Agency (EPA) released the Clean Power Plan Proposed Rule under the authority of Section 111(d) of the federal Clean Air Act. This Proposed Rule would establish state-specific goals to limit greenhouse gas emissions by setting firm carbon reduction standards that each state would have to meet beginning in 2020 and accelerating through 2030. While it is unclear whether the EPA will revise its Final Rule, which is expected by July 2015, many states in the Southern Legislative Conference (SLC) of The Council of State Governments already have enacted legislation addressing the Clean Power Plan Proposed Rule and its regulations.
This SLC Issue Alert provides an overview of some measures taken by state legislatures in the SLC region to address the Clean Power Plan Proposed Rule through the 2014 legislative session. This Issue Alert is not a legal analysis of Section 111(d), nor does it take a position on compliance pathways or the EPA's proposed state-specific carbon dioxide (CO2) goals.
Vapor Rising: E-Cigarettes in the SLC States
In recent years, the United States has seen a growing popularity with the use of electronic cigarettes and similar electronic nicotine delivery devices. Electronic cigarettes, or e-cigarettes, are battery-operated single-use or reusable devices with interchangeable cartridges that use a type of heating element to turn nicotine and other chemicals into a vapor inhaled by its user. The cartridges come in a variety of colors and flavors, like apple pie, cotton candy, mint chocolate, and tutti frutti, just to name a few. It is suggested that the array of flavors, combined with the relative ease of purchasing e-cigarettes and its components at mall kiosks and online, has made e-cigarettes particularly popular among youth.
This Regional Resource from The Council of State Governments' Southern Office, the Southern Legislative Conference (SLC), examines the regulations proposed by the FDA and the actions taken by 14 of the 15 SLC member states with regard to e-cigarettes through the 2014 legislative session.
Tale of Two Cities: The Impact of Slumping Oil Prices on the Economy
As the effects of dipping oil prices ricochet through the United States and the world, it is increasingly becoming clear that there are winners and losers. Triggered by an explosion in American oil and gas production levels; sputtering economic trends in Europe, China, Japan, Russia and emerging markets leading to declining demand; increasing production from producers like Iraq and Libya; countries like Saudi Arabia, a producer with an oversized impact on global oil supplies, maintaining supplies at current output levels and resisting production cuts; and the strengthening of the U.S. dollar have acted in concert to substantially push oil prices downward: from $115 a barrel in June 2014 to less than $50 a barrel in January 2015.
The latest plunge in oil prices has sent seismic waves throughout the globe, prompting disparate consequences in different sectors of the United States and world economies; while some sectors are net beneficiaries of the decline, other sectors are on the losing end of the falling price of oil. High energy prices pose huge burdens for most Americans, particularly those who drive great distances each day and those who only can turn the thermostats down so low when the weather turns cold. Hence, increasing energy prices result in consumers cutting back on their discretionary spending, a trend that causes negative consequences on state, regional and national economies. However, when energy prices fall, consumers have considerable leeway in devoting these savings toward other expenditures. Meanwhile, tumbling oil prices lead to adverse consequences at several points in the economy with repercussions at both the state and national levels. In that vein, SLC Regional Resource examines the effects of low oil prices on both state economies and the greater nation.
Scholarship Programs for Associate's Degrees in SLC Member States
Since the turn of the 21st century, the United States has maintained a cultural creed that the only path to a middle-class lifestyle is through a four-year bachelor's degree or higher. However, increasing analyses are demonstrating that industries with the highest growth in the next decade will demand skills readily obtainable through a two-year technical education. Moreover, several policy and industry experts have begun raising concerns about the ever-increasing gap between middle-skill jobs (those requiring more than a high school education but less than a four-year degree) and the number of middle-skilled workers available to fill those jobs. These findings, along with evidence indicating that middle-class household incomes are more attainable by those with a member holding at least an associate's degree, are steering SLC policymakers toward creating and expanding programs that increase their technical and community college graduation rates. In that vein, this SLC Regional Resource examines efforts by policymakers in selected SLC member states to implement postsecondary scholarships programs specifically targeted at increasing their number of two-year degree graduates.