Peak oil and local manufacturing

Peak oil and the true cost of carbon will lead to a resurgence of local manufacturing.  Companies will find it cheaper to make things near their customer base again. 

I respect the current local manufacturing base.  But while perusing the latest edition of BizLex, I came across a chart listing the top 32 manufacturing companies in the region reveals something which I think we should at least be aware of.  A little quick math shows a very large percentage of manufacturing jobs are devoted to auto production.  

Here’s the breakdown:

  • 49% of the employment of the 32 companies listed are devoted to autos (11,992 of 24,337 employed)
  • 10 of the top 20 companies are devoted to autos
  • 13 of the 32 companies are devoted to autos 

So, while the proportion of auto companies to the whole is 40%, the percentage of the workforce devoted to autos is 49%. 

This seems very heavily weighted to me.  And remember, in the peak oil time, even Toyota has said that gas will be too expensive to burn in internal combustion engines within 10 years.  Peak oil will also limit credit, meaning fewer people will be able to afford new cars.

Thus, within a few years, without making a transition, we could have a dramatic drop in our industrial base.   

The good news could be that we still have a trained industrial workforce, which could be transitioned to making other things besides personal autos – like light rail cars, for example.   Or more likely, the smaller things we need on a more daily basis.

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