[robrenaud]

I was talking about behavior of employers on the margin, not about increasing employment by an order of magnitude.

Certainly I agree that my argument is limited by changes at scale and also only applies to individual companies within an industry rather than entire industries as a whole.

On the other hand, if Chevy gained a competitive advantage and could produce cars say, 10% cheaper than they used to be able to, it would usually make sense for them to produce more cars, potentially selling them for cheaper. The car industry as a whole still couldn't sell many more cars, but the Chevy would still be better off, taking some market share their competitors.

On the other hand, I think the implicit assumption in the article is that the recession shocked the economy and there was a significant drop in demand. Even if Chevy realized some efficiency gains during the recession, they are still better off cutting production and letting those efficiency gains limit workforce size because the demand curve changed.