Contribution of the Motor Vehicle Supplier Sector to the Economies of the United States and Its 50 States
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The motor vehicle industry is the largest manufacturing industry in the United States. No other single industry is linked so closely to the U.S. manufacturing sector or directly generates so much retail business and employment. When people think of the automobile industry, they most likely picture a very large assembly plant staffed with thousands of people, equipped with
conveyor belts and robots as far as the eye can see and producing many hundreds of thousands of motor vehicles year after year. What these same people probably don’t see are the many supplier companies that design and manufacture the parts needed by the manufacturers to assemble motor vehicles. Whereas parts-making operations were an integral function of the large motor vehicle assembly companies in years past; that is no longer the case today.

With a growing share of the annual sales coming from automobiles built by foreign-based companies and an increasing foreign direct investment in U.S.-based assembly and support operations, supplier companies have been in upheaval for the past two decades. Many suppliers to U.S.-based motor vehicle companies have seen their businesses shrink as their customers’ market share has decreased. Conversely, other suppliers have seen their businesses grow as their motor vehicle company customers claim a larger share of the U.S. market. This shift has led to the movement of many jobs away from the traditional locations for automotive employment to other regions of the country where there is new investment from growing international companies. While it may, at first blush, look like the automobile industry and its supplier sector is shrinking in the United States due to the movement of many basic parts operations to low-wage regions of the globe, the true story is one of continuing operations in a dynamic, hugely successful industry─with some companies shrinking as other companies

The motor vehicle supplier sector has become the backbone of the motor vehicle assembly industry, employing approximately 783,000 people in 2004 —substantially more than the number of people employed by the assemblers. The supplier companies design, engineer and manufacture the vast majority of the parts that go into a modern-day motor vehicle. This report, undertaken at the request of the Motor & Equipment Manufacturers Association (MEMA), will provide an estimation and analysis of the employment and economic contribution of the supplier-related jobs in all of the fifty states and the District of Columbia.

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