Auto Manufacturing: Driving America Forward

A robust auto manufacturing sector is vital to a healthy U.S. economy. Autos drive America forward by providing powerful manufacturing presences in communities, providing paychecks for millions of families and generating substantial tax revenues.

Big and Small Business

Auto manufacturing is a major customer of many of our economy’s biggest names, including 3M, IBM, GE, HP, Dow, Microsoft, Intel and Oracle. In fact, half of the companies listed in the Dow Jones Industrial Average depend on autos for revenue. While automakers are the most visible part of the industry, auto manufacturing encompasses many diverse businesses in communities coast to coast — 47 states have more than 10,000 auto-related jobs, and 20 of those states have more than 100,000 auto jobs.

Top Primary Materials Customer

Automakers are among the largest purchasers of aluminum, copper, iron, plastics, rubber and steel. They also utilize many recycled products, from plastic bottles converted into new carpeting to aluminum converted into new car door frames. Auto companies are also customers of agriculture, converting biomaterials like soy into seating cushions and biomass into tires. In addition, automakers are major purchasers of special metals needed for new clean car technology.

Auto Jobs

Today, 8 million Americans and their families depend on automobiles for their livelihoods. Automakers directly employ 1.7 million people to design, engineer, manufacture and supply parts to assemble, sell and service new motor vehicles. When indirect and community support jobs are added, automakers support a total of 3.1 million jobs nationwide. Suppliers support another 3.3 million workers, and dealers support 1.5 million (direct, indirect and spin-off jobs).

Paychecks

Since 1 in every 17 jobs depends on autos, compensation arising from U.S. auto manufacturing is substantial, amounting to more than $500 billion a year. That is more than the U.S. spends annually on Medicare ($452 billion) and nearly the size of the Defense Department budget ($553 billion, FY 2012). In fact, the automotive payroll is almost double what all 50 states combined spend on public education ($260 billion).

R&D Investments

The auto industry traditionally has invested $16-18 billion annually, on average, on research and development, ranking the industry among the top investors in innovation. 99 percent of this R&D is generated by the auto industry, with the federal government contributing only 1 percent. Innovation supports jobs, including more than 50,000 engineers employed in the greater auto industry, according to the Bureau of Labor Statistics. Many of these engineers were educated at one of the 100 universities and technical centers with automotive schools.

Global Leadership

Manufacturing autos is vital to a strong economy, since prosperity is so linked to mobility. Of the 7 top global economies, every one of them has a significant auto manufacturing presence (U.S./Canada, 9.8 million vehicles; China, 18.3 million; Japan, 9.6 million; Germany, 5.9 million, Brazil, 3.6 million; India, 3.5 million; based on 2010 production). In fact, among the countries which compose the major economies of the world called the “Group of 20” (G20), only one country (Saudi Arabia) does not have auto production.