The motor vehicle parts industry is an invisible giant that has been overlooked in the past but plays a significant role in the economy, states David E. Cole, chairman of the Center for Automotive Research.
In fact, U.S. motor vehicle suppliers comprise the nation's largest manufacturing sector and directly employ 783,100 people across the country, according to a new study conducted by the Center for Automotive Research on behalf of the Motor & Equipment Manufacturers Association (MEMA).
During a press conference last month, MEMA shared the results of the study, including the fact that motor vehicle parts manufacturers contribute to 4.5 million private industry jobs and 5.5 percent of all U.S. manufacturing jobs.
Presenters of the study report that the vehicle parts industry is a combination of little factories scattered across the country and therefore had been overlooked in the past. However, they hope this study will help policy-makers understand the industry's significance as decisions are made.
Cole further breaks down the study results: In addition to direct employment jobs, 1.97 million indirect jobs are created in industries such as steel, plastics and technical services that support motor vehicle parts manufacturing. An additional 1.7 million spin-off jobs are supported by spending from direct and indirect employees (such as doctors and lawyers), he adds.
"The income generated by the average person in this industry is over $45,000 per year," says Cole.
Taking it to the Hill
Ann Wilson, vice president of government affairs for MEMA, expects this research to help the industry when it comes to legislative issues. "The organization has a job to fill in the industry to educate policy-makers," she says. "We will work with the states where suppliers are the No. 1 employer to detail what our legislative priorities are."
Motor vehicle suppliers are the top employers in seven states: Indiana, Kentucky, Michigan, Missouri, Ohio, South Carolina and Tennessee.
Cole adds: "Local, state and federal policy-makers need to understand that when they mess with the part suppliers, they're having a huge effect on the economy.
"We think the invisible giant is beating the challenges of a global economy," he continues. "(The industry) designs and manufactures the majority of parts that go into a modern-day vehicle. The importance of the auto parts supplier industry both to employment in our economy and economic measures is far more significant than any of us thought prior to this study."
Bob McKenna, MEMA president and CEO, says the organization plans to share information from this study with Capitol Hill. He adds that spin-off studies for the supplier industry are being considered. To view the study, visit MEMA's new government affairs Web site at www.automotivesupplier.org.
