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Oregon’s auto industry is booming: Is that a good thing?

Posted by on January 23rd, 2018 at 12:59 pm

Good news?

How can Oregon make progress in its fight against car abuse when cars represent one of the largest sectors of our state’s economy?

It feels good for Oregon bicycle advocates to talk about “bikenomics,” but the truth hurts: our state’s auto industry is a behemoth that casts a very long shadow. According to an article published Sunday in the Portland Tribune, there was $10.6 billion in new vehicle sales in 2016 (the latest year figures are available). That amounts to a whopping 17.9 percent of all retail sales statewide.

As the Trib story says, auto dealers are celebrating a “banner year” as they ready for their biggest moment — the annual Portland Auto Show held at the Oregon Convention Center this weekend.

Here’s more from the Trib piece:

“… the sales figures only hint on the impact that new car dealers have in the state. For starters, there were 218 of them in state in 2016, more than enough for at least one in every city of any size. Each employed an average of 60 people. The total payroll was $716 billion million, with $305 million paid in state and federal income taxes.

“Just about the only equivalent employer is the state are school districts,” says Remensperger [executive vice president of the Metro Portland New Car Dealers Association]…

But the dealerships supported even more indirect and induced jobs in their community, bringing the total number they created in 2016 to 27,045 — a sizeable percent of the state’s total workforce by any measure.

“This economic engine provides jobs and incomes that in turn create vibrant livable communities around the state. We are proud that our industry helps bring families together, creates lasting memories and serves the communities where we live,” says Chris Meier, a partner at the Herzog-Meier Auto Center, president of the Metro Portland New Car Dealers Association and vice-president of the Oregon Auto Dealers Association.”

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Mural of Oregon inside OMSI shows everything our state loves — and there are no cars in sight.
(Photo: J. Maus/BikePortland)

These should be sobering statistics for people who want to see Oregon prioritize transit and bicycling over single-occupancy auto use.

Here are some of the questions I’m thinking about after seeing that article:

➤ When most lawmakers and community leaders see cars as a vital piece to our economic puzzle, how can we create a political environment where car use is seen not as a benign behavior, but for what it also is: an extremely costly (to its users, government, and the public), environmentally harmful, public safety threat that should be done sparingly and only when other options are not available?

➤ Is it possible to achieve our transportation and environmental goals and maintain a healthy and robust auto industry?

➤ Could a comparable economic boost be provided by a state that dramatically improves its public transit and bicycling networks?

Whether overt or behind-the-scenes, there’s no denying the power of the auto industry in Oregon. As our department of transportation begins a conversation about congestion pricing, I hope we can separate what’s good for long-term policy from what’s good for short-term pocketbooks.

— Jonathan Maus: (503) 706-8804, @jonathan_maus on Twitter and jonathan@bikeportland.org

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NOTE: We love your comments and work hard to ensure they are productive, considerate, and welcoming of all perspectives. Disagreements are encouraged, but only if done with tact and respect. If you see a mean or inappropriate comment, please contact us and we'll take a look at it right away. Also, if you comment frequently, please consider holding your thoughts so that others can step forward. Thank you — Jonathan

42 Comments
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    Dave January 23, 2018 at 1:08 pm

    If the cars of cell phoning drivers ended up in crushers, they’d have to replace them more often!

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    Chris I January 23, 2018 at 1:17 pm

    Another way to view auto dealers: giant vacuums, sucking wealth away from our residents, and funneling it to car manufacturers and their workers in other states and countries.

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      Ted Gresh January 28, 2018 at 6:10 pm

      Except that money is not being taken from anyone, people are voluntarily utilizing there hard earned cash to buy cars.

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        9watts January 28, 2018 at 6:16 pm

        That is one way of looking at this, but certainly not the only one. Have you never heard anyone lament the compulsion to buy a car? I’m sure you’ve also heard that our society is built around them, which kind of gives the game away, doesn’t it.

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    Mike Quigley January 23, 2018 at 1:36 pm

    Well, look at it this way. Dumb cars are being replaced with smart cars that can detect a pedestrian or bike or other car in the way while the driver is distracted.

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      Middle of the Road Guy January 23, 2018 at 2:40 pm

      I am curious how many of the sales are replacements for existing vehicles, as compared to “n+1”. How many are trucks, how many are lower emitting vehicles, etc.

      I will admit to being surprised at just how large of an employment footprint there is, though – wow!

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      rick January 23, 2018 at 2:42 pm

      That won’t change that fact that so much of Highway 99E and SW Canyon Road are still car-centric and not pleasant when riding a bike. Many floating sidewalks.

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    rick January 23, 2018 at 2:40 pm

    I’ve kept telling Beaverton, Tigard, and Washington county governments to put a moratorium on the new construction of car dealers. None will listen or recognize the hazard. The car dealer highways are death routes.

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    rick January 23, 2018 at 2:45 pm

    Washington state at least has a $5 fee for each tire that gets metal-studs installed. It went into effect in late 2016.

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      Buzz January 23, 2018 at 8:13 pm

      $5 per studded tire is better than nothing but still totally inadequate, it should be more like $100+.

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      • John Liu
        John Liu January 23, 2018 at 9:50 pm

        $5 won’t deter people from buying studded tires. It should be more like $100. For the great majority of drivers and vehicles, there is no need for studs. My little Prius goes everywhere during snow and ice events on studless snow tires, I can drive (carefully) on icy roads that you can hardly walk on. We used to drive to Yakima multiple times every winter (family there) over snowed over passes, 18 wheelers were chained up and struggling, we were motoring along.

        Studded tires are cheaper than studless. They need to be a lot more expensive.

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          Chris I January 24, 2018 at 10:42 am

          Even $50 per tire would make studless a cheaper option. At that point, the only people buying studded tires would be the morons who think they need metal spikes to get grip in snow, when studless technology has been proven to be just as effective, and safer for other road conditions (wet, dry, etc).

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        rick January 24, 2018 at 9:51 am

        I agree, but I think it should be $500 per tire.

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    Smarty Pants January 23, 2018 at 3:04 pm

    This is an awesome thing because it means in 10 years there will be a large pool of used, fairly cheap cars available – particularly the kind that YOU drive and not a computer – and many of the available cars will have collision avoidance warnings, etc. I don’t want a hackable computer piloting my car, possibly killing me:
    https://www.cnbc.com/2018/01/23/tesla-on-autopilot-crashes-into-fire-truck-on-california-freeway.html

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      Chris I January 24, 2018 at 10:44 am

      Meanwhile, over 40,000 people died on our roads last year due to human error.

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      Middle of the Road Guy January 24, 2018 at 1:21 pm

      I’m more alarmed by the fact that it is a Federal crime to disable an onboard GPS. And nearly all cars have them now.

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        Smarty Pants January 29, 2018 at 8:16 pm

        Good reason to buy an older model car, but if you have a smart phone (probably almost all cell phones), that thing probably has a GPS in it also – and they can for sure tell which cell tower it’s pinging. So, if you want to be undetected then leave your phones at home. Of course, cameras will record you in thousands of locations as you pass by.

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    Rain Waters January 23, 2018 at 3:19 pm

    Driving thru Medford on I-5 overpass you see one corporate logo on one glass and steel corporate homestead. That would be the word,
    LITHIA.

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    BradWagon January 23, 2018 at 3:53 pm

    It could be… but like everything that could use it’s power for good but doesn’t, it isn’t.

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    Gerik January 23, 2018 at 4:23 pm

    I’ll say that this reality commands the State of Oregon’s transportation-political environment. It is part of the reason why we focus on building support and funding for new sidewalks, bike lanes, and crosswalks with Safe Routes to School. At The Street Trust we’ve proven it is a way to win tangible victories while some portion of AAA’s approx. 750,000 local dues-paying members push for wider roads.

    As I understand the genesis of The Netherlands’ evolution towards being a world leader on bicycle infrastructure and culture they had a grassroots uprising against “kindermorten” or child death on the streets. It seems to me that we should push, hard, to reorient our communities to prioritize safe streets adjacent to our schools. This is something everyone, whether they’ve heard of this blog or not, should be able to get behind.

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      Eric Leifsdad January 24, 2018 at 10:21 am

      Instead of courting 0.75M AAA voters, let’s talk about the 3.25M residents who are not members. 13,000 employees vs financial solvency? The people who drive because they’ve never really thought about it and would bike if the infrastructure didn’t give everything to cars first?

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    B. Carfree January 23, 2018 at 7:38 pm

    I seriously doubt if a sector with $10.6 billion in sales has $716 billion in payroll. The arithmetic of the dealer numbers and the average number of employees tells me that the payroll total was $716 million (about $55k per employee).

    So, Oregonians are leaking nearly $10 billion to out of state car manufacturers, some 93% of the total spent. Add in the even worse situation with gasoline and we’re being played for fools big time.

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    • John Liu
      John Liu January 23, 2018 at 9:44 pm

      I think your correction of billion to million is correct.

      As for “leaking” $10 billion to other states, isn’t that inherent in interstate commerce?. When people in other states buy Intel chips, Nike shoes, Danner boots, Showers Pass jackets, etc, should they be upset about “leaking” billions of dollars to Oregon?

      Maybe we should stop buying any bicycles made outside of Oregon.

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        Chris I January 24, 2018 at 10:46 am

        The fact is, when citizens drive less and walk/bike more, more of their wealth stays in their local community. Riding a Chinese-made bike vs. a US-made car leaves the operator with thousands of extra dollars every year that they can spend on local restaurants, services, groceries, etc.

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        B. Carfree January 24, 2018 at 4:10 pm

        What’s the local economic multiplier on spending, something like four-fold? That means that the $10.8 billion in auto sales generates about $2.8 billion of economic activity in Oregon (only the portion paid out in-state generates action here). However, it only takes about $800-900 million in Bike Friday sales to generate that same amount of economic activity.

        Granted, Bike Friday only dreams of such a volume of sales, but if the state did a better job of discouraging car use and expenditures we could probably more than make up the economic losses with bikey stuff.

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          Chris I January 25, 2018 at 8:36 am

          If we had even a 2 or 3% modal shift from cars to cargo bikes, you would see several new local manufacturers pop up. The market is just so small right now.

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      SilkySlim January 24, 2018 at 9:23 am

      Misleading math much?

      By your account, car dealers have zero costs besides payroll. No rent/mortgage for their facilities, utilities, equipment, marketing, taxes, insurance, etc etc etc. And of course many of these are provided by Oregon companies or Oregonians working for out-of-state companies – aka money that “stays”.

      No doubt though that these out-of-state if not international car companies make jillions of dollars.

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        Eric Leifsdad January 24, 2018 at 10:15 am

        B’s math is solid. Payroll eclipses costs for “facilities, utilities, equipment, marketing, taxes, insurance, etc”. Maybe “more than $9B” vs “nearly $10B”.

        The glaring discrepancy here is payroll of $716B vs $10B in sales. Jonathan, I think your article misses the point that the auto industry is actually a drain on Oregon in every way.

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    Buzz January 23, 2018 at 8:12 pm

    Last time I checked, Lithia Motors was one of the top 3 or 5 employers in Oregon.

    Not to split hairs, but auto sales and maintenance is actually a different thing than the auto industry, as in very little if any actual manufacturing is occurring in Oregon.

    But everything related to trucks and automobiles probably still accounts for something like one in six jobs in the US, and even that may not count the regulators and remediation workers that clean up leaking gas stations or the health care workers that care for the crash victims and asthma sufferers.

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      Buzz January 23, 2018 at 8:16 pm

      So I guess the correct expression would be the ‘automobile sector’, rather than the ‘automobile industry’.

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    Eric Leifsdad January 24, 2018 at 11:05 am

    This Portland Tribune article is trash, not even accurately reporting the auto-industry advocate’s press release (and littered with car ads.) The car salesman’s take is just wrong and misleading. An industry that takes 18% of retail sales and employs only 1% of the workforce is a drain on the economy. Even counting their the “induced jobs”, they still don’t crack the top ten.

    http://bluebook.state.or.us/facts/economy/employment.htm
    https://www.nada.org/WorkArea/DownloadAsset.aspx?id=21474837355

    (Granted, getting people out of their cars would reduce obesity and maybe cut into healthcare employment.)

    I’m disappointed in this reporting. This story should have been a takedown of the Tribune’s cars-first bias and even examining the motivations behind it.

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    9watts January 24, 2018 at 11:16 am

    No one has addressed the question of why people are so primed to gobble up new cars.

    I think Carl Gustav Jung might be able to help us here.
    Deep down we know the end (for automobility, for us, for food security, etc.) is nigh, and by buying a new car we are engaging in a delusional bit of theater in which we are participating in a collective denial of the obvious.

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      Middle of the Road Guy January 24, 2018 at 1:22 pm

      Some of the happiest days in my life where when I sent in my last car payment.

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    Andrew Margeson January 25, 2018 at 6:52 am

    Instead of just using a stick to thrash car dealers and drivers, the bike community should get behind carrots. We need a radical improvement in public transportation. Give everyone a viable alternative to driving a car. This would indirectly benefit the bike community as there would be fewer cars on the road.

    In the Portland area, TriMet is not getting the job done.

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      9watts January 25, 2018 at 7:35 am

      “public transportation[…] a viable alternative to driving a car.”

      Except that public transportation is *not* a thoroughgoing alternative to driving a car. It does not and cannot offer the point-to-point convenience of the car (or bike or feet or mule).
      I’m all for investing in public transportation, for improving service, expanding routes, etc., but I am under no illusion that it can be relied upon to take substantial people out of their cars. Can you point to any city in the world where this had actually come to pass?

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        Andrew Margeson January 25, 2018 at 7:48 am

        Of course, it is not a viable alternative to all driving of cars, not here, not anywhere else. That isn’t the point. We need a substantial reduction in vehicle miles travelled. A successful policy will have carrots and sticks. For example, improved public transportation funded at least in part by congestion pricing.

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          9watts January 25, 2018 at 7:50 am

          “We need a substantial reduction in vehicle miles travelled.”

          Of course we do. But that compulsion in and of itself doesn’t make it so. Excellent bus service has not, on balance, done much to reduce VMT. Can you show me otherwise?

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    Lazy Spinner January 25, 2018 at 3:08 pm

    Are car sales up in Oregon because many cannot afford to buy a home or upgrade to a newer and nicer one? If you’re priced out of housing, you can salve those feelings of inadequacy and appear more successful to your peers in a plushed out, top-of-the-line luxury vehicle. Behind houses, cars have always been the next best status symbol for the average person.

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    Mike Sanders January 25, 2018 at 3:44 pm

    The average price to buy a home in Portland is close to breaking the half million dollar barrier. Livable housing is being pushed further away from downtown. You’re gonna hear lots of talk in Salem next month about moving the urban growth boundary significantly outward. And you’ll hear lots of talk of new roads to serve those outer suburbs, not ped/bike paths. I cringe every time I go thru Oak Grove on 99E and see those back to back car lots…and ped/bike paths are almost nonexistent thru that area. Ever wonder why? Developers want to push working folks as far from downtown as possible. It’s a nasty form of redlining.

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      9watts January 25, 2018 at 5:58 pm

      “moving the urban growth boundary significantly outward.”

      Interestingly folks here in the bikeportland comments for the most part don’t want to hear any talk of pushing back against growth.

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