changes in michigan automotive industry employment bernard swiecki industry analyst economics and...
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Changes in Michigan Automotive Industry Employment
Bernard SwieckiIndustry Analyst
Economics and Business GroupCenter for Automotive Research
February 28, 2002
Contribution of the Auto Industry to the U.S. Economy in 1998: The
Nation and Its Fifty States
Performed by CAR for the Alliance of Automobile Manufacturers
Winter 2001
1998 Vehicle Firm Employment and Payroll by State
Illinois 14,603 2.4% 933 2.2%Indiana 44,694 7.2% 2,668 6.4%Michigan 260,444 41.9% 19,387 46.5%Minnesota 3,950 0.6% 161 0.4%Ohio 98,383 15.8% 5,982 14.3%Wisconsin 9,740 1.6% 601 1.4%Total 431,814 69.5% 29,732 71.2%
Automotive Employment
% of National Employment
Total Automotive Payroll (millions of $) % of National Payroll
1998 Automotive Compensation1998 Automotive Compensationper Employeeper Employee
Source: Company surveys
29,776
66,58461,53776,905
25,95131,647
0
20,000
40,000
60,000
80,000
100,000
120,000
Salaried Hourly Total
Co
mp
ensa
tio
n
Avg. Payroll Avg. Benefits
$102,856$93,184 $96,360
1998 Michigan Automotive Employment: Alliance Study
Vehicle Firms:Vehicle Firms:
Manuf. Supplier Empl.:Manuf. Supplier Empl.:
New Dealer Empl.:New Dealer Empl.:
Dealer Supplier Empl.:Dealer Supplier Empl.:
Spin-off Empl.:Spin-off Empl.:
Total Empl.:Total Empl.:
Total CompensationTotal Compensation
260,400260,400
274,400274,400
28,90028,900
21,70021,700
422,100422,100
1,007,5001,007,500
$44.7 bil.$44.7 bil.
1998 Michigan Automotive Employment 1998 Michigan Automotive Employment - Survey- Survey
Vehicle Firms:Vehicle Firms:
Parts and Component Firms:Parts and Component Firms:
Pre-production Firms:Pre-production Firms:
Other Manufacturing:Other Manufacturing:
Business Services:Business Services:
Wholesale Trade:Wholesale Trade:
260,444260,444
119,643119,643
88,33288,332
??
??
??
Jobs Contributed Across the 50 States
Michigan
Ohio
California
Illinois
Missouri
South Dakota
Alaska
1,007,500
630,800
462,900
311,900
221,200
14,000
4,600
1996 Value Added per Employee1996 Value Added per Employee
Source: U.S. Census Bureau, 1999 Statistical Abstract of the United States, p. 748.
Apparel and other textile productsFurniture and fixtures
823298
235137
120119118117114
10194938886
7372686156565244
0 100 200 300 400 500 600 700 800 900Dollars (Thousands)
Lumber and wood products
Leather and leather products
Fabricated metal products
Printing and publishing
All Manufacturing
Primary metal industries
Food and kindred products
Instruments and related products
Motor vehicles and equipment
Petroleum and coal products
Textile mill products
Misc. Manufacturing industries
Rubber and misc. plastic products
Stone, clay, and glass products
Industry machinery and equip.
Paper and allied products
Electronics; other electronic equip.
Transportation equip.
Chemicals and allied products
Tobacco products
($ thousands 1996)
Big 3 U.S. Employment
623,133
380,682
442,708
164,344137,264
72,320
10.4%
23.7%
30.2%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
85 95 98Year
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Hourly Salaried Salaried Percent of Employment
Source: Company Reports
Em
plo
ymen
t
Per
cen
t S
alar
ied
Big 3 Michigan Employment
245,095
192,915
161,316
50,369
97,20994,48417.0%
37.6%
32.9%
0
50,000
100,000
150,000
200,000
250,000
300,000
85 95 98Year
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Hourly Salaried Salaried Percent of Employment
Source: Company Reports
Em
plo
ymen
t
Per
cen
t S
alar
ied
Michigan: The High Technology Automotive State
Performed by CAR for the MEDC
April, 2000
R & D Spending by Industry - 1997R & D Spending by Industry - 1997Motor Vehicle is 1st of 39 Major U.S. IndustriesMotor Vehicle is 1st of 39 Major U.S. Industries
5,240
5,606
5,677
7,377
7,961
10,786
11,318
11,586
12,787
13,758
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000
$millions
Motor vehicles & motor vehicle equipmentMotor vehicles & motor vehicle equipmentMotor vehicles & motor vehicle equipmentMotor vehicles & motor vehicle equipmentOffice, computing, & acctg. machines
Drugs and medicines
Computer & data processing services
Electronic componentsTrade
Communication equipmentAircraft & missiles
Other machinery, except electrical
Optical, surgical, photographic & other inst.
Source: National Science Foundation/SRS, Survey of Industrial Research and Development: 1997
States Ranked by IndustrialStates Ranked by IndustrialResearch & Development - 1997Research & Development - 1997
Michigan Ranked 2nd of the 50 StatesMichigan Ranked 2nd of the 50 States
5,608
6,248
6,609
6,610
7,265
8,300
9,939
11,069
13,009
34,011
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000
$millions
MICHIGANMICHIGANMICHIGANMICHIGAN
CALIFORNIA
NEW JERSEY
MASSACHUSETTS
WASHINGTON
ILLINOIS
NEW YORK
TEXAS
PENNSYLVANIA
OHIO
Source: National Science Foundation
• Engineers, Math and Computer Scientists
• Engineering Technicians
• Science Technicians
• Computer Programmers
High-Tech OccupationsHigh-Tech Occupations
Big ThreeBig ThreeTechnology Employment Questionnaire ResultsTechnology Employment Questionnaire Results
Total 1998
Auto Employment
High-Tech Auto Employment
492,887
47,548
U.S.
235,807
37,489
Michigan
47.8%
78.8%
Michigan %
1998 Big Three1998 Big ThreeTechnology Employment Questionnaire ResultsTechnology Employment Questionnaire Results
235,807
257,080
37,48910,059
050,000
100,000150,000200,000250,000300,000350,000400,000450,000500,000550,000
High-Tech Auto Employment Auto Employment
492,887 (U.S.)
47,548 (U.S)
Michigan All other states
1998 Big Three1998 Big ThreeTechnology Employment Questionnaire ResultsTechnology Employment Questionnaire Results
High-Tech Employmentas Percentage of TotalAuto Employment
3.9%
Other states
15.9%
Michigan
1998 Big Three1998 Big ThreeTechnology Employment Questionnaire ResultsTechnology Employment Questionnaire Results
3.9%
15.9%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
High-Tech Employment as % of Total Auto Employment
Michigan Other states
Well, the Unemployment Rate is Only 5.6%. . .and Things are Looking Up
. . .by Summer
• But 1.2 million Americans have been forced into part time work
• And 20-25% of Tooling and Small Manufacturing Firms will fail by summer
• Wages are falling, Pensions are Disappearing, and Health Insurance for the Nation may be seriously reduced . . .
• No Investment . . .And a Record Trade Deficit
1.6 Million Jobs Gone!Manufacturing Jobs and the Trade Deficit:
1980-2000
-500-450-400-350-300-250-200-150-100
-500
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00
.
.
BOG-World Tot-Prod-Manuf
$-449.5 bil.
$-25.5 bil.
14.2 mil.12.6 mil.
Manuf. Wages Fall as the Deficit Rises!1980-2000
-500
-450
-400
-350
-300
-250
-200
-150
-100
-50
0
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00
$Bil.
Year
$13.60$13.80$14.00$14.20$14.40$14.60$14.80$15.00$15.20$15.40$15.60$15.80
BOG-World Wage-2001
$15.21/hr.
$14.77/hr.
No Connection Between Productivity and Growth in Manuf. Wages: 1981-2000
-0.02
-0.01
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00
%Wage Change Prod Growth
Premium for Automotive Labor?Relative Auto Wages 1959 - 2000
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
0%10%20%30%40%50%60%70%80%
Average U.S. Mfrg. Wage Average US ManufacturingSIC 3711 SIC 3711 Wage Premium
$2.80
66%
$24.59
$14.84
28%
$2.19
Source: BLS
16 ¢/Hr. in India!1998 and 1995 Total Compensation/Hr. for Motor Vehicle Manuf. Production Workers in Selected
Countries
26.5
527
.49
20.8
120
.5
2.51
2.94
29.2
5
23.3
8
10.8
5
7.75
7.06
6.68
41.5
836
.7
16.5
19.6
3
0
10
20
30
40
50
60
$/Hr.
U.S.Canada
Mexico
Japan
Korea
Taiwan
Germany
U.K.
1995 1998
Where Did 400,000 Jobs Go?U.S. Auto Parts Imports
1990 – 2001Billions of Current Dollars
31.7 29.833.5
38.344.9 46.4 48.4 50.7
54.361.6
66.9 69.8
90 91 92 93 94 95 96 97 98 99 0 01
Year
$Billions
Source: USDOC/ITA
InternationalAutomotiveSupplier andManufacturerLocations
InternationalAutomotiveSupplier andManufacturerLocations
HONDA EAST LIBERTY HONDA EAST LIBERTY
TOYOTATOYOTA
NISSANNISSAN
SUBARU-ISUZUSUBARU-ISUZU
I-75I-75
I-70I-70
I-65I-65
HONDA MARYSVILLE HONDA MARYSVILLE NISSAN-CANTONNISSAN-CANTON
Ala
bam
aA
laba
ma
Mis
siss
ippi
Mis
siss
ippi
MERCEDES-VANCEMERCEDES-VANCE
HONDA-LINCOLNHONDA-LINCOLN
New International Assembly Facilities 2001-2003New International Assembly Facilities 2001-2003
BMW-Expansion
Honda-OdysseyOdyssey-Engine
Mercedes-Benz-Expansion
Nissan-Truck
Nissan-V8 Engine
TMM-IndianaExpansion
Toyota V8 Engine
New Vehicle Total
Spartanburg, S.C.
Lincoln, ALLincoln, AL
Vance, AL
Canton, MS
Decherd, TN
Gibson County, IN
Huntsville, AL
1,400
2,000?
2,000
4,000
1,000
2,000
350
?
?
$600
$935
$600
$800
?
60,000
120,000120,000 eng
-80,000
200,000
200,000
200,000
?
860,000
NewEmployment
NewCapacity
Investment($ Millions)
LocationCompany
International Automotive NA Truck Incremental Capacity
1.0 million units
VW AAC +75K; MB Tall Wag +50KVW AAC +75K; MB Tall Wag +50K
Sienna +25K; Highlander +75K; Scenic +50KNissan FS PU +100K, SUV +50K, I/SUV +25KQuest +25K; Honda FS PU +100K, FS SUV +50K
Toyota Matrix +75K; RX300 +50KToyota Matrix +75K; RX300 +50KTracker –50K; Honda MAV +75K; Odyssey +50KTracker –50K; Honda MAV +75K; Odyssey +50K
Honda SUV +100K; Subaru ST/X +25K
2.1 million units
2001
2002
20032003
2004
20052005
2006
Source: CSM Worldwide
A Few Conclusions
• Michigan has done well in attracting high paying, desirable automotive employment, but…
• Needs to do better in attracting it from foreign vehicle firms and suppliers
• Despite impressive productivity improvements, manufacturing jobs have suffered