WASHINGTON – The auto industry has been a mainstay of the U.S. economy for more than a century, says Sean McAlinden, vice president of the Center for Automotive Research (CAR).
No other industry directly generates as much retail business and employment as auto manufacturing, McAlinden says at a recent DaimlerChrysler AG Innovations Symposium here.
Sean McAlinden, vice president of Center for Automotive Research.
Studies CAR performed last year for the Alliance of Automobile Manufacturers (AAM) reveal that U.S. auto makers constitute the largest motor vehicle industry in the world. Ward’s data shows total U.S. production in 2004 at 15,032,105.
McAlinden says the U.S. auto industry employs 1.3 million Americans in manufacturing alone, and that OEMs employed about 500,000 Americans in 2004.
“Our job multiplier studies show that this direct employment generates another 4.5 million supplier and spin-off jobs (created by the spending of vehicle and supplier employees) for a total of 5 million jobs contributed by automotive manufacturing to the private sector of the U.S. economy," McAlinden says.
"That works out to a jobs multiplier of 10 – or nine additional jobs in the U.S. economy for every job at a vehicle manufacturer like DaimlerChrysler," he says, noting DC operations in the U.S. employ 101,000 workers, generate another 900,000 jobs and support more than 113,000 retiree families.
CAR's studies also show new-car dealerships add 2 million jobs and, combined with the 5 million manufacturing jobs, bring the industry total wages tally to $335 billion.
Other studies for the AAM disclose that an additional 7 million jobs are related to the use and servicing of vehicles and roads, for a total of 14 million jobs related to U.S. motor vehicles, or one out of every 10 jobs in the economy, McAlinden says.
Automotive jobs pay more, he says. In 2003, an average assembly job paid $64,000 annually and workers for a supplier grossed $45,000. That compares with an average U.S. salary of $27,000.
However, McAlinden cautions U.S. automotive jobs "are at severe risk in the most challenging and globally competitive market in industry history."
Because vehicles and components can be built anywhere in the world, there is no room for slack in any area of the industry, he says. "Business survival demands it.
"Policies today at the state and federal levels must reflect this competitive reality, for government, too, is a supplier of labor, education, training, health, transportation and many other services to today's auto industry," McAlinden adds.
"Good suppliers will still prosper and grow with today's auto industry. States with the best policies regarding the support of competitive manufacturing will prosper as well."
There still is opportunity to grow the industry, McAlinden suggests. "We have the world to still put on wheels."
He also says U.S. auto makers have more to fear from South Korean manufacturers (See related story: Bricklin Will Miss Initial Sales Target)Motor Co. Ltd. and Kia Motors Corp. than Chinese auto makers such as Malcolm Bricklin’s Visionary Vehicles LLC which plans to import vehicles made in China by Automobile Co. Ltd. to the U.S. starting in 2007.