Month: July 2009

In the last several months, the global auto industry has undergone a transformation as profound as any in its history. Despite a $50 billion taxpayer bailout, two of the three biggest US automakers, General Motors and Chrysler, have filed for bankruptcy. As the auto industry plans for its new smaller future, public health advocates need to consider how this restructuring will affect health. In this Commentary, CHW briefly describes some of the recent changes in the global auto industry, examines the possible health impact of these changes, and suggests possible directions for public health research and policy advocacy.

In the last several months, the global auto industry has undergone a transformation as profound as any in its history.  Despite a $50 billion taxpayer bailout, two of the three biggest US automakers, General Motors (GM) and Chrysler, have filed for bankruptcy. Almost 300,000 auto workers have been laid off and more than 2,000 auto showrooms closed.  While every sector of the industry has been hurt by the economic crisis, foreign car makers like Honda, Toyota and Hyundai continue to gain market share and Fiat, an Italian car maker, is expected to soon complete its purchase of Chrysler. After decades of government stalling, in May, President Obama announced tougher new federal fuel emission and mileage standards for US autos, creating new pressure for change.¹ As the auto industry plans for its new smaller future, public health advocates need to consider how this restructuring will affect health.  In this Commentary, Corporations and Health Watch briefly describes some of the recent changes in the global auto industry, examines the possible health impact of these changes, and suggests possible directions for public health research and policy advocacy. Our goal in this preliminary report is to raise questions   for more systematic analysis in the months and years ahead.

Downsizing Detroit

In the last 18 months, 289,000 workers in the US auto industry lost their jobs, about half were auto assemblers and the other half worked in the auto supply networks.² Between September 2008 and March 2009, these two sectors of the auto industry accounted for nearly 20% of the decline in the nation’s gross domestic product.  In Spring 2009, US car makers were producing 423,000 vehicles a month, down from 600,000 late last year.² Some industry analysts predict that by the end of 2009, a total of 3,800 auto dealerships will be closed, almost double the number closed to date.  The auto industry’s troubles predate the economic crisis –rising oil prices, a collapsing market for SUVs, and intense competition from European and Asian car makers all contributed to the industry’s meltdown.

Globally, the auto industry is also running off the road.  The London-based HIS Global Insight Automotive Group estimates that total 2009 passenger car and light truck production will fall to 59.8 million units in 2009, a 16% drop from 2007.³ In the last year, car sales have declined in Japan, Europe and elsewhere.  In 2008, auto sales in China hit a ten year low, although the Chinese stimulus plan, which provides subsidies for car purchases, has helped to lift sales more recently.  As Michel Freyssnet observed in Le Monde, what is striking about the current crisis in the automobile industry is that “there is not any major market nor any manufacturer that is not in decline.” ⁴

In January 2009, people in China bought 748,000 cars, a 4.6% reduction from the year before while in the U.S., people bought 657,000 cars in January, a 37.1% reduction.⁴ This statistic highlights the changing face of the global auto industry.  In the coming decade, most analysts agree that European, Japanese, and Chinese car makers will outpace the US industry, with Brazil, South Korea and India not far behind.

In China, for example, the high cost of gasoline is pushing even tougher fuel emission mandates than those announced by President Obama.  In a plan released in May, China will require car makers to improve fuel economy an additional 18% by 2015, creating new pressures for more fuel efficient and smaller cars.⁵ Already China imposes a sales tax of 1% on fuel-efficient cars and 40% on gas-guzzling SUVs and sports cars.  Since most multinational auto companies are vigorously competing for a share of the Chinese auto market, China has the potential to play a leading role in setting global environmental and production standards. As Dieter Zetsche, the chairman of Daimler, said at the opening day of the Shanghai auto show in April, “The center of gravity is moving eastward. This has, if anything, only accelerated through the crisis.”⁶

Auto industry analysts, from the  World Watch Institute⁷ to KPMG⁸ to the US Department of Commerce⁹, seem to agree that if the auto industry is to survive, it must make fewer, smaller and better cars, with an emphasis on more environmentally friendly  and fuel efficient vehicles.  It also seems likely that carmakers in other countries, especially China, will continue to grow in influence.  While the emerging auto markets in the global South are likely to demand smaller and more fuel-efficient cars, if their goal is to achieve developed nation levels of car ownership the overall adverse impact of cars on health and the environment may continue to grow.  In the coming decade, this tension between equity in ownership levels and sustainable patterns of automobile production will dominate the debates among the global automobile industry, policy makers and environmentalists.  On the one hand, the developed nations have no right to tell Asians, Africans and Latin Americans that they can’t have cars. On the other hand, a continued rise in automobile use will inevitably choke our cities, pollute our air, injure and maim growing numbers of people, and exacerbate human-induced climate change, all trends that will hurt the global south more.  Only by reframing the issues can we escape this dilemma.

In the coming decade, this tension between equity in ownership levels and sustainable patterns of automobile production will dominate the debates among the global automobile industry, policy makers and environmentalists.

One important influence on how much Americans will drive and what kinds of cars they will buy is the price of gasoline.  In the United States, oil demand has dropped without interruption for more than 15 months. Globally, the International Energy Agency estimated that daily average oil consumption would decline by 3% in 2009. ¹⁰ A rapid economic recovery, new oil production and consumer optimism could lead to more driving and fewer incentives to buy small cars.  Conversely, a long recession, high gas prices, or continued political conflict in Nigeria, Iraq, Russia, Venezuela or other major oil-producing countries could accelerate the trends to less driving and smaller, more fuel-efficient vehicles.

How does the auto industry influence health?

For the last century, the auto industry has been a major influence on health.  It has changed the air we breathe, the form of our cities and suburbs, and contributed to rising rates of obesity by encouraging sedentary behavior.  An extensive literature documents the profound social and environmental impact of the automobile.^11, 12, 13 At the individual level, automobile ownership has been associated with various health benefits.  As Macintyre et al. note, car ownership can increase access to employment, shops selling healthy affordable food, leisure facilities, social support networks, health services and open space and help owners to avoid crime.¹⁴

At the population health level, more attention has been focused on the adverse impact of the density of automobile ownership.  Here we consider its impact in four separate domains: air pollution, climate change, automobile accidents and injuries, and physical inactivity.  Also of vital importance but considered only briefly below is the industry’s impact on the well-being of its workers and the communities in which its factories are located.

Air pollution Outdoor air pollution causes an estimated 800,000 deaths around the world  each year and motor vehicles are a major source of  such pollutants as nitrogen oxides (NOx) and volatile organic compounds (VOCs)—which interact to form ground level ozone—and of microscopic particulate matter (PM10).  It is estimated that 1.4 billion people are exposed to urban air pollution above World Health Organization (WHO) limits. Deaths from air pollution are only the tip of the iceberg. For example,  for every death caused by PM10  there will be 34 emergency admissions, 407 asthma days, 6,085 reduced activity days, and 18,864 acute respiratory symptom days.¹⁵

Climate change In April 2009, the US EPA issued a proposed finding that carbon dioxide (CO2) poses a danger to health and welfare, opening the door to federal regulation of CO2 from all sources.¹⁶ According to Environmental Defense, the United States has 5% of the world’s population and 30% of the world’s automobiles, but it contributes 45% of the world’s automotive CO2 emissions.¹⁷ Thus, reducing car use and increasing fuel efficiency of cars are essential steps in reversing human-induced climate change.  According to Dan Becker, the Director of the Safe Climate Campaign, the improvements in fuel efficiency standards that President Obama announced last month are, “the biggest single step to curbing global warming.  It’s a major step forward in cutting auto emissions.” ¹⁸

Accidents In the last century or so, cars have killed at least 30 million people, perhaps many more—each year cars kill 1.2 million and injure 50 million.¹⁹ According to the World Health Organization, traffic deaths and injuries are rising worldwide, likely to double by 2020 and automobile accidents are the leading cause of death for 10 to 24 years old.¹⁹ Children in less developed countries (LDCs), especially those in densely populated cities, experience the highest burden of automobile injuries, dying at six times the rate of children in higher income countries and accounting for 96% of all children killed in traffic collisions.¹³ The US automobile industry has a long record of opposing public health measures to improve car safety including seat belts, air bags and auto-locking brakes.  Over the 20th century, as consumer and government pressure forced the US auto industry to add safety devices, auto deaths and injuries fell dramatically.  Still, in the 1990s, automaker decisions to promote SUVs at the expense of sedans contributed to thousands of preventable deaths in the US from rollovers, crashes and collisions with pedestrians.²⁰

Obesity/physical inactivity More recently, automobiles and the cities and suburbs designed to accommodate them have been implicated as one factor contributing to rising rates of obesity.  As cars have become more central in many transport systems, people are less likely to walk to shops or work and fewer children walk to school. One study found that each additional hour spent in the car was associated with a 6% increase in the likelihood of obesity.²¹

How will the restructuring of the auto industry influence its impact on these and other health outcomes?

Box 1 lists possible implications of some of the previously described trends.  Future research will need to test these possible associations across time and place, seeking to gain insights into the pathways by which changes in auto industry practices lead to changes in health and health behavior.  In addition, changes in the automobile industry are likely to be associated with other changes in the global economy, trends which may interact to produce positive or negative health consequences.

Box 1. Possible Health Consequences of Changes in the Auto Industry

Trend	Possible Health Effects
Fewer automobiles produced	Less driving, less air pollution including C02 emissions, fewer accidents and injuries, more walking and less obesity
Higher proportion of smaller more fuel efficient cars	Less air pollution including less carbon dioxide emissions and less global warming
Fewer miles driven	Less air pollution, fewer accidents and injuries, more walking and less obesity
Higher rates of automobile ownership  in Asia, Africa and Latin America	More air pollution, more accidents and injuries, and less physical activity, exacerbating North-South health inequities

Finally, any review of the health consequences of the auto industry restructuring must acknowledge the profound adverse impact on workers in the automobile industry and on the communities where the auto industry has been centered.  Hundreds of thousands of auto workers have and will lose their jobs and often their health insurance, putting them at risk of prolonged unemployment, home foreclosure, and high levels of stress.  In addition, these catastrophic losses are concentrated in a few cities and regions, most notably Detroit and its suburbs, in the US, where they further jeopardize the well-being of populations already suffering from more than two decades of deindustrialization.

Future policy and research for a healthier auto industry

In the US, as in the rest of the world, the goal is not simply to restore the auto industry to a health that has often sickened the world by producing unsafe, polluting and environmentally damaging cars.  To avoid this future, auto makers, government policy makers, public health and environmental professionals, labor unions, and advocates will need to engage in an ongoing dialogue.  Here, Corporations and Health Watch suggests some proposals that may help to spark this dialogue.

1. Move from state to federal regulation for automobile safety and environmental standards.

In the past many years, public health and environmental activists have often emphasized state rather than federal regulation because of the business friendly environment in Washington. The recent economic crisis and the 2008 election may provide a window of opportunity to move the action back to Washington where decisions can benefit the population as a whole and pressure industry to meet consistent standards.   Industry may now be willing to support such a move, at least in those cases where federal regulation doesn’t threaten profits. As the Alliance of Auto Manufacturers noted in May, a national program for regulating CO2 “avoids conflicting standards from different regulatory agencies, and it gives automakers much needed certainty for long-term product planning.”²²

2. Reinvigorate the National Highway Safety and Transport Administration and the Environmental Protection Agency.

For the federal government to play a positive role in reducing the health and environmental consequences of the automobile industry, it will need a vigorous and science-based regulatory infrastructure, much of which was decimated under the Bush Administration.  Rebuilding these agencies will provide the means to implement new policies.

3.  Consider the quid that tax payers can expect for the quo of the auto industry bailout.

Bailouts are not, by themselves, a solution to the auto industry’s problem.  As Joseph Romm, a former US Energy Department staffer, wrote recently in Salon, “when you bail someone out of jail, there is no guarantee that he won’t jump bail, and even less of a guaranteed that he won’t ultimately end up in jail anyway.”²³ So continued government support has to be contingent on auto makers acting in the public interest.  Among the auto industry practices US tax payers ought not to subsidize are: deceptive advertising that implies big cars are safe, design of cars that are environmentally damaging, or lobbying to thwart public health protections.

Film maker Michael Moore, who 20 years ago showed the seamy side of GM in his film “Roger and Me,” recently suggested that President Obama²⁴ follow the example President Roosevelt set after the attack on Pearl Harbor.  Then, FDR ordered GM to halt car production and begin to produce planes, tanks and machine guns. Now, Moore urged Obama to convert our auto factories into ones capable of building mass transit vehicles and alternative energy devices.

4. Construct clear, compelling narratives and frames to present the issues facing the American auto industry to the American public.

For decades the US auto industry has opposed reforms that will reduce the public health and environmental harms its products cause, and, for decades, the American public has had difficulty contesting the industry’s self-serving arguments. Now the American public is much less likely to trust auto industry executives to decide what’s best for America. To realize this opportunity, public health and environmental advocates will need to find new language and narratives to help Americans consider their options.  Recently, the psychologist Drew Westen and the pollster Celina Lake suggested some frameworks for discussions about auto industry reform, illustrated in the diagram below, in which the words in blue suggest future directions and those in red the policies we want to escape.²⁵

In the coming years, the auto industry will continue to change. Whether public health and environmental advocates will be able to influence those changes for the better depends on our success in engaging a wide variety of constituencies in policy debates about the future of the car.  By understanding the health and environmental consequences of these changes and communicating them clearly, we have an opportunity to join the discussion.

By Nicholas Freudenberg, Distinguished Professor and Founder and Director of Corporations and Health Watch.

References

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