Automotive: the world’s largest manufacturing sector. The industry is rapidly changing with major impacts from supply chains across the United States and around the world. While microchip shortages, one of the causes for diminished inventory, are slowly improving, shortages are expected to last through at least the second quarter of 2022 but expected to rebound by 2023. As we know when obstacles arise there is always room for growth and new strategies. In the next few years, investments and research in the U.S. will contribute to the revival of manufacturing across America, and supply chain changes will boost auto employment, production, and sales in the U.S.
A major shift is taking place with a continued focus on electric vehicles, the companies that make the parts and consumer goals of creating greener, safer, and smarter automobiles. The United States is investing billions towards an ‘all electric’ future with an emphasis on automotive standards, environmental stewardship, international trade, research and development, and most importantly job creation.
The current administration is pushing a 50 percent shift of vehicle sales to be electric by 2030 instead of fossil fuels. Legislation has passed that is providing $7.5 billion across the nation for a network of electric charging stations to be built along with incentives, tax credits and continued funding for infrastructure.
The American Automakers Automotive Policy Council (AAPC) which represents Ford Motor Company, General Motors and Stellantis are hoping Congressional efforts will enhance U.S. production of semiconductors through the America COMPETES Act. The America COMPETES Act includes $52 billion to dramatically increase semiconductor production in the U.S., including $2 billion for semiconductors specific to the auto industry.
“No other U.S. industry has been as severely impacted by the shortage of semiconductors as the automotive industry,” said Governor Matt Blunt, president of AAPC. “It is critical that the United States make investments to expand semiconductor production so that American automakers have access to these essential components in auto manufacturing.”
While all states represent some piece of the automotive sector from manufacturers, engineers, sales, suppliers are more, some of the top states in the industry include Florida, Michigan, Kentucky, Alabama and Texas and these states along with many others are creating programs and allocating funds for projects that focus on rapidly developing a highly skilled workforce and on infrastructure initiatives that attract businesses, create jobs, and promote economic growth for the automotive sector.
Florida Governor Ron DeSantis announced that nearly $10 million has been awarded through the Florida Job Growth Grant Fund to Osceola County and Valencia College to support semiconductor and other advanced technology manufacturing in Osceola County. Included in this award is $6 million to assist with developing infrastructure connecting the county’s emerging NeoCity technology district with the county’s workforce and $3.7 million to Valencia College to develop a new program that will train students in utilizing robotics technology for semiconductor manufacturing. These two awards will combine to create manufacturing jobs while developing a talent pipeline that supports industry growth.
NeoCity is an effort in Osceola County to develop a location for semiconductor research, development, and manufacturing through partnerships within the emerging high-tech industry.
Valencia College will use $3.7 million in funding to address the workforce development needs related to incorporating robotics technology into the manufacturing and distribution industry sectors through the Accelerated Skills Training Program in Robotics Technology. This workforce program also includes a specialized semiconductor track designed to prepare future robotics technicians for the semiconductor industry and an Advanced Robotics Learning Factory. This program was developed as a direct result of partnerships between Central Florida businesses and Valencia College.
Texas is home to 1,752 automaker facilities while ranking No. 7 in the U.S. for automotive manufacturing employment. Over the past decade, Texas automotive exports have more than doubled from $9.2 billion in 2009 to over $18.5 billion in 2016 while experiencing a 17 percent increase in automotive manufacturing since 2014.
Texas Governor Greg Abbott declared in January 2022 that his state “will be the home of semiconductor manufacturing going forward” as the chip shortage has been affecting companies around the globe. The State of Texas is placing more of an emphasis on serving industrial and automotive businesses, which have accounted for the hardest hit end markets during the global chip shortage.
As for Texas’ electric future, the state will receive $408 million dollars from the infrastructure plan for charging stations to persuade Texans to buy more electric with additional grants and tax credits expected. Since manufacturers have faced a global shortage of the parts and technology needed, Texas Instruments announced the company will be investing $3.5 billion annually in its U.S. semiconductor chip manufacturing. Texas Instruments is currently working on construction and will begin production by 2025 at two facilities in Sherman, Texas with four total factories in the pipeline.
Automotive is a critical sector of Alabama’s economy and has turned the state into an important production hub for automakers and suppliers. Together, assembly plants operated by Mercedes, Honda and Hyundai have propelled Alabama to a Top 5 ranking among the states for the production of cars and light trucks. Alabama automakers have a combined capacity topping one million cars and light trucks each year.
Employment in Alabama’s automotive manufacturing sector today approaches 40,000, surging from just a few thousand in the days before Mercedes. Around 24,000 of these jobs are in Alabama’s growing automotive supplier network, which now counts 150 major companies.
Both employment and production are receiving a massive boost from the Mazda Toyota Manufacturing joint venture assembly plant in Huntsville, where production began in 2021. The Huntsville facility will employ up to 4,000 workers after a ramp up.
The output of Alabama’s auto industry is a powerful driver of economic growth for the state. Vehicles have become Alabama’s No. 1 export, with shipments to over 80 nations around the world. In 2020, exports of Alabama-made vehicles and parts approached $8.3 billion, led by shipments to China, Germany and Canada. Training programs from AIDT, the Alabama Community College System and the Alabama Robotics Technology Park in Decatur are preparing a skilled workforce for Alabama’s auto industry and will continue to pick up pace.
The State of Michigan remains a major player in the automotive industry, with nine out of 10 of the world’s largest automakers and 46 of the world’s top 50 global automotive suppliers with R&D facilities in Michigan alone.
General Motors (GM) announced in January a historic investment that will secure GM’s commitment to creating an all-electric future, and 5,000 new and retained manufacturing jobs, in Michigan. The $7 billion investment includes a $4 billion investment to convert GM’s Orion Township assembly plant to produce full-size EV pickups and up to $2.5 billion to build Ultium’s third U.S. battery cell plant in Lansing, growing the state’s global leadership in electric vehicle and advanced battery production.
The Michigan Strategic Fund approved support for GM’s transformational projects in Orion Township and the Lansing area, creating 4,000 new jobs and generating $6.5 billion in total capital investment. In addition to these EV-related investments in Michigan, GM also announced it is investing more than $510 million in its two Lansing-area vehicle assembly plants to upgrade their production capabilities for near term products.
“GM’s $7 billion investment in Michigan—the largest in their history—will create and retain 5,000 good-paying jobs and enable us to build on our legacy as the place that put the world on wheels. When it comes to investing in Michigan, GM and I have the same philosophy: ‘Everybody In.’ Michigan’s future is bright, and I will continue working with anyone to make transformational investments in our economy, create good-paying jobs, and empower working families.” –– Governor Gretchen Whitmer
Georgia has been an established automotive manufacturing center since 1909, when the first automobile was assembled in the state. Throughout the past hundred years, leading automotive companies have consistently chosen Georgia as their home for manufacturing, assembly, headquarters, and innovation centers. Georgia’s location in the center of the southeastern United States provides proximity to a diverse group of manufacturers within a 300-mile radius.
Governor Brian P. Kemp announced in January 2022 that Rivian Inc. (Rivian) will invest $5 billion in a carbon-conscious campus in Georgia for its electric adventure vehicles. Across operations, Rivian will create approximately 7,500 jobs on just under 2,000 acres located at the site known as the East Atlanta Megasite, represented by the Joint Development Authority of Jasper, Morgan, Newton, and Walton counties. Once manufacturing operations are fully ramped up, the Georgia facility will be capable of producing up to 400,000 vehicles per year. Rivian’s manufacturing plant represents the single-largest economic development project in state history.
The state is a premier destination for automotive manufacturers and the technology companies that are developing the transportation system of the future. The industry contributes $3 billion to Georgia’s economy.
Kentucky’s automotive landscape is rapidly changing as companies prepare for an electric future and that extends to companies located in or considering locating in the Commonwealth. The state is preparing to accommodate this growing industry as it continues to evolve. Kentucky is a major player within the automotive sector. As automakers across the globe position themselves for a future that relies more heavily on electric power, the State of Kentucky has taken steps over the past year to ensure its place as a premier location for automotive-related production for decades to come.
The industry’s shift toward electric power is also apparent through the growth of numerous other companies across Kentucky. In October, TMMK announced a $461 million reinvestment that will transition 1,400 team members from indirect roles to direct Toyota positions. The project will provide facility upgrades, including preparation for future vehicle electrification, while increasing operational speed and flexibility to allow the operation to produce new vehicles in the future.
Nemak Kentucky plans to invest $27 million and create 170 jobs at its Glasgow facility to support future electric vehicle-related business. A subsidiary of Nemak USA Inc., the company has manufactured innovative lightweight products for powertrain, e-mobility and structure applications in Barren County since 2012.
Firestone Industrial Products also broke ground on a $50 million expansion in Williamsburg in August 2021. The 68,000-square-foot addition to the existing 375,000-square-foot facility will create 250 full-time jobs to support the company’s growing presence in the EV market.
The auto industry is the United States largest exporter and generates more jobs than any other field. In the United States, the auto industry is one of the biggest investors in research and development with over 5,600 auto part suppliers, including 871,000 jobs and 47 auto plants including 390,000 jobs.
As of 2021, the total value of the car and automobile manufacturing market in the United States is $82.6 billion. Automakers and their suppliers continue to drive the U.S. economy accounting for over three percent of the gross domestic product.
In total, the automotive industry employs over 1.7 million people annually including auto industry jobs like engineering, manufacturing, sales and design. Every state contributes to the industry including large auto manufacturers, the companies that make the parts, and the truckers, trains, and ports that transport goods.