Remarks by National Economic Advisor Lael Brainard on Sustaining American Auto Leadership
Detroit Economic Club, Detroit, Michigan
As Prepared for Delivery
Thank you to the Detroit Economic Club for hosting me today. It is a pleasure to be back in the Motor City where I had a great time working on autos in one of my first jobs.
I want to thank Governor Whitmer for her important partnership, along with Mayor Duggan, County Executive Evans, Senators Stabenow and Peters, and Representatives Dingell, Stevens, Tlaib, Thanedar, and many others.
The President and Vice President are determined that America’s iconic automakers and autoworkers are positioned to win the future. Our auto strategy is designed to invest in America’s world class autos supply chain from end to end; take tough, targeted enforcement actions against China’s unfair practices; and invest in America’s best-in-class autos workforce.
Today, I am pleased to announce two important new steps to advance our autos strategy. We are proposing a first-of-its-kind rule to safeguard America from the risks posed by connected vehicles from China. And we are building out the Michigan Workforce Hub to give workers the skills they need to contribute to this dynamic sector and expanding access to capital for small- and medium-sized auto manufacturers.
The American Auto Sector
The auto sector is an iconic American industry and our largest manufacturing sector. Over 3.2 million Americans work in the auto industry, and one third of those are in manufacturing jobs. The auto sector creates good-paying, union jobs that provide a ladder to the middle class, a sense of community, and the opportunity to work and retire with dignity.
Nowhere is that more evident than right here in the proud city of Detroit and the great state of Michigan.
While it wasn’t born here, America quickly made the auto industry our own. Here in Detroit, Henry Ford revolutionized transportation by mass producing a car for the common man. By 1930, the Big 3 had come to dominate global auto sales. The legendary Flint sit-down strike in 1936 gave rise to the United Autoworkers, and by 1941, hundreds of thousands of UAW members had good-paying, middle class jobs and pensions at the Big 3. During World War II, the auto industry became the center of the Arsenal of Democracy, churning out bombers, tanks, and engines by the thousands.
When the Global Financial Crisis hit our auto sector hard, President Obama and then-Vice President Biden came to the rescue of the Big 3 and Detroit. UAW members made difficult sacrifices to get the industry back on its feet.
Just a decade later, the pandemic brought new challenges. Decades of offshoring had left our supply chains fragile, and shutdowns of semiconductor factories in Asia and shipping disruptions led to layoffs on shop floors here and unfinished vehicles piling up in parking lots.
Our automakers and autoworkers are no stranger to a tough fight. And this Administration has always stood with them.
We worked tirelessly with business and labor to move semiconductors to auto plants and repair snarled transportation and logistics networks. These actions and our recovery plan enabled U.S. auto production to rebound three times faster than Europe. During this Administration, the U.S. auto industry has created more than 275,000 new jobs – in contrast to the loss of 86,000 auto jobs under the previous administration.
Now our automakers and autoworkers face another seismic shift – the growing presence of clean vehicles, the rise of connected cars, and a wave of underpriced Chinese auto exports hitting global markets due to Chinese overcapacity.
Investing in America’s Auto Supply Chain
The President and Vice President have a comprehensive strategy to position the American auto sector to win the future.
First — we are investing in America’s auto supply chain from end to end to make sure American autos remain best in class. That means investing in every stage, from small suppliers to final assembly, and using every tool at our disposal, from grants and loans to tax credits. This investment approach deploys demand- and supply-side incentives, from removing barriers to providing upfront consumer rebates to bolstering our domestic supply chains.
Through the Bipartisan Infrastructure Law, we are building a nationwide network of EV charging stations and building a domestic supply chain for batteries and critical minerals. Just last week, we announced $3 billion in selections for projects through the Battery Supply Chain Awards, including several projects in Michigan, to boost domestic production of advanced batteries, funding the expansion and construction of new facilities for critical minerals, battery components, battery manufacturing, and recycling.
Through the CHIPS and Science Act, we are supporting dedicated investments for the legacy chips that power cars and the advanced chips and materials that enable electric vehicles to drive further and charge faster.
Through the clean energy incentives in the Inflation Reduction Act, we are providing families with an up-front rebate of up to $7,500 when they choose to buy a U.S.-made electric vehicle with U.S. batteries and materials. The Department of Energy’s Domestic Automotive Manufacturing Conversion Grant Program is providing $1.7 billion of federal investment that is leveraging $5 billion in total investment to help retool 11 auto plants across eight states to produce electric vehicles and electric vehicle (EV) components while protecting good jobs and union jobs. Michigan is receiving $650 million of federal investment from this one program alone.
These incentives have already driven historic investment totaling more than $177 billion in the EV supply chain, including in the battery supply chain that China dominates. They are supporting investments that are projected to transform the United States into a major lithium producer by the end of the decade and that are now projected to produce batteries to meet all forecasted U.S. demand for EVs by 2030.
Protecting American Autos from Unfair Competition
Second — we are taking tough, targeted action to protect our auto sector from security risks and to ensure China does not unfairly undercut our auto sector. Americans should drive whatever car they choose – gas powered, hybrid, or electric. But, if they choose to drive an EV, we want it to be made in America, not in China.
In order for companies to invest in innovative new designs and models here in America, they need to be assured that their investments won’t be undercut by unfairly underpriced cars from China. And in order for consumers to be safe and secure in increasingly connected cars on American roads, we need to guard against national security risks from China.
China is flooding global markets with a wave of auto exports at a time when they are experiencing overcapacity. We have seen this playbook before in the China shock of the early 2000s that harmed our manufacturing communities. We saw it in Michigan – according to one analysis, the Detroit metro area lost more than 55,000 manufacturing jobs due to import competition from China. We are seeing that same playbook in EVs and batteries after a period when China compelled American automakers to form joint ventures and license their technology in China.
The Administration is determined to avoid a second China shock, which means putting safeguards in place before a flood of underpriced Chinese autos undercuts the ability of the U.S. auto sector to compete on the global stage. That’s why this Administration imposed a new 100% tariff on EVs imported from China. It’s why we increased tariffs on China to diversify the autos supply chain, including on EV batteries, legacy semiconductors, and critical minerals.
Many of our allies, including Canada and the European Union, have followed our lead. Moving forward, we will partner with Mexico and Canada to ensure that our North American supply chains remain free from state-owned enterprises and foreign entities of concern. China’s overcapacity in EVs will be a major area of focus as we look to the U.S.-Mexico-Canada trade agreement mid-term review in 2026.
And today, we are taking action to guard against safety and security risks in connected cars and ensure that our auto supply chains are resilient from foreign threats. Connected cars have the ability to exchange data with other cars, your personal devices, America’s infrastructure, our power grid, and auto manufacturers. The computer systems that power these cars can control vehicle movement and collect sensitive driver and passenger data, and the cameras and sensors embedded within them can record detailed information about our country and citizens.
There are many benefits associated with connected vehicle systems, such as promoting safety, assisting drivers with navigation, and reducing emissions. But where we source these technologies has important implications for our national security, safety on our roads, and the resilience of our auto supply chains.
China has taken steps to dominate the future of connected vehicles by dominating the software and hardware systems associated with those cars. But connected vehicles with Chinese software and hardware systems could expose the American people to new risks. Without the appropriate safeguards in place, sensitive data on Americans could be passed to Chinese authorities, or connected vehicles might provide a backdoor for malicious foreign actors to engage in espionage or sabotage.
That is why, today, the Department of Commerce is using its ICTS (Information and Communications Technology Services) authorities for the first time to propose a new rule that would ban vehicles that rely on Chinese software and hardware from driving on American roads.
Recall that for years China has required vehicle and battery makers to rely on Chinese data centers and software providers as a condition of operating in China.
In effect, this rule will protect against potential vulnerabilities while allowing Americans to benefit from all that connected vehicles and technological innovation have to offer.
Investing in America’s Auto Workforce and Small Suppliers
Third — we are investing in the autoworkers and small suppliers that are the backbone of our auto sector. We want to ensure that the next generation of leading American autos is produced by union autoworkers and that no auto community is left behind, especially here in Michigan.
Today, we are unveiling new resources for workers through the new Michigan Workforce Hub. This spring, the President designated Michigan as a Workforce Hub to help Michigan workers prepare for the good jobs created by historic investments in the EV supply chain. The Workforce Hub, which we’ve developed in partnership with the Michigan Department of Labor and Economic Opportunity, will expand pathways to EV and battery manufacturing jobs and union jobs, particularly for underserved communities in the state.
Today, the Department of Labor and the Michigan Department of Labor and Economic Opportunity are announcing a new pilot program to train workers in Wayne County for over 140 high-quality jobs in the auto supply chain, partnering with local automotive employers to enable workers to earn a paycheck while they train, addressing a major barrier to enrollment.
In addition, the Department of Energy’s Battery Workforce Challenge Program is announcing over $1 million to fund curriculum, equipment, internships, and job placements in community colleges, high-schools, and training institutions across the state. Henry Ford Community College, for example, will receive $200,000 in seed funding to establish a state-of-the-art Battery and Electric Vehicle Technical Center. Key partners in these programs will include the Michigan Economic Development Corporation, high schools, vocational institutions, community colleges and universities, and battery and automotive manufacturers.
Through our Good Jobs Executive Order, we’re ensuring the benefits of federal grants and investments accrue to workers and communities. For instance, the projects receiving Domestic Conversion Grants will create nearly 3,000 new good-paying auto jobs and retain 15,000 high skilled, union jobs. As a condition for these grants, manufacturers committed to supporting their local communities and workforce. By supporting strong investments, we also support pathways to the middle class, including through union jobs.
For instance, Blue Bird pledged to expand training programs in local high schools and invest in childcare for working parents at its facilities. And ZF North America is using their Conversion grant to retain and retrain 536 workers – mostly UAW workers – at its facility in Marysville, Michigan, for the production of components to electrify vehicles.
Last year, the UAW secured record contracts with the Big 3 that will help ensure an equitable transition to electric vehicles. Since then, we have seen a large number of additional automakers announce record wages, and a rise in new labor organizing. From Tennessee to Georgia, and in new battery plants in Ohio and Michigan, workers in the EV supply chain are seeing the benefits of joining a union.
Our auto workforce also includes hundreds of small and medium-size suppliers manufacturing products ranging from screws and bolts to e-axles. The U.S. economy has added more than 55,000 jobs in manufacturing automobile parts and bodies during this Administration. Many are based here in Michigan: in fact, 96 of the top 100 auto suppliers in North America do business in Michigan and 60 are headquartered here.
This summer, Vice President Harris came here to Detroit to announce more than $100 million from across the federal government to support small- and mid-sized suppliers and parts manufacturers. That includes. millions of dollars we set aside from the manufacturing conversion grants program for states to make awards to small- and medium-sized suppliers because we heard from officials and suppliers right here in Michigan that smaller manufacturers struggle to tap into large federal grant programs directly.
Today, we are building on the Vice President’s announcement with additional actions to support capital access for small- and medium-sized suppliers. This includes a commitment from Monroe Capital to launch a new fund of up to $1 billion to provide lower-cost debt capital to auto manufacturers, as well as a $9.1 million grant from the Department of Treasury to launch the Michigan Auto Supplier Transition Program, which will help small and underserved automotive manufacturers and aftermarket suppliers secure financing to scale and shift to supply the EV supply chain.
Conclusion
Our economic resilience and national security have been tied to the strength of our auto sector for the past century. Now it is critical the U.S. auto sector is positioned to lead the 21st century.
We believe that an investment in our auto supply chain – especially here in Michigan – is one of the best investments we can make. That’s why we are investing across the supply chain and strengthening our suppliers, small businesses, workers, and communities that are the lifeblood of the industry.
Today’s announcements underscore our commitment to auto communities, union jobs, and to the competitiveness and safety of the U.S. auto sector. It is part of a comprehensive approach that is forward looking and leverages the strengths of American manufacturing and the talents of American automakers – here in Detroit, throughout Michigan, and across the country.
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