Publication Date

8-3-2009

Abstract

[Excerpt] The U.S. motor vehicle manufacturing industry' employs 880,000 workers, or approximately 6.6% of the U.S. manufacturing workforce, including those who work in the large motor vehicle parts manufacturing sector, as well as those who assemble motor vehicles. Since the beginning of the decade, the nation's automotive manufacturing sector has eliminated more than 435,000 automotive manufacturing jobs (or an amount equal to about 3.3% of all manufacturing jobs in 2008). The employment level first dipped below one million in 2007 and fell to 880,000 workers last year. With the restructuring and bankruptcy of Chrysler and General Motors, and the ongoing recession in the auto sector, employment in the nation's automotive manufacturing industry will most likely shrink in 2009 and 2010 as additional assembly, powertrain, and auto parts plants close. This report provides an analysis of automotive manufacturing employment, with a focus on national and state trends. The 111th Congress continues to be heavily engaged in oversight and legislative proposals in response to the unprecedented crisis of the domestic motor vehicle manufacturing industry.

The Detroit-based automotive manufacturers (General Motors, Ford, and Chrysler) have suffered a series of setbacks in recent years with their share of the domestic market dropping from 64.5% in 2001 to 47.5% in 2008. As a consequence, the traditional auto states of Michigan, Indiana, and Ohio have been—and will continue to be—heavily impacted by the changes taking place in the automotive sector. Together, there are now 152,000 fewer automotive manufacturing jobs in these three states than there were five years ago.

Recent automotive sales and production data indicate the enormous changes taking place in today's motor vehicle manufacturing sector. For instance, automotive sales fell to 13.2 million units in 2008, down by 18% from 2007, and forecasts indicate U.S. consumers are expected to purchase fewer than 10 million cars and light trucks in 2009. There has also been a loss of market share by the Detroit 3 producers which has created gains for foreign-owned domestic manufacturers and imports. Some recent Detroit 3 automotive manufacturing employment losses are partially offset by new investments by foreign-owned manufacturers in the United States as they have open, or will open, new plants in states like Indiana, Georgia, and Tennessee.

Many Members of Congress, and especially those members from the traditional auto belt states of Michigan, Indiana, and Ohio, have expressed their concerns about lost jobs in the automotive manufacturing sector. With the sale of GM assets to the U.S. government and Chrysler assets to Fiat, two new companies have emerged that will be substantially smaller than the companies that went into bankruptcy. As a consequence, the total level of motor vehicle manufacturing employment will be reduced, especially in locales where facilities have closed. The most recent automotive manufacturing employment data indicate that 42% of all persons in the industry work in one of the three traditional auto belt states, each of which at present employs more than 100,000 persons in the industry. Michigan alone has accounted for 40% of the net job loss in the industry since 2003. Losses in Ohio and Indiana have been less severe, offset somewhat by foreign investment. Alabama, with fewer total automotive manufacturing employees, has been the big job gainer, adding over 12,000 auto manufacturing jobs since 2003. Texas, now the eighth largest state by automotive employment, gained 5,200 jobs between 2003 and 2008. Auto industry states in the South including Kentucky, South Carolina, and Tennessee have lost jobs in recent years, but far fewer than in the traditional auto belt states.

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Suggested Citation
Platzer, M. D. & Harrison, G. J. (2009). The U.S. automotive industry: National and state trends in manufacturing employment. Washington, DC: Congressional Research Service.
http://digitalcommons.ilr.cornell.edu/key_workplace/666

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