By Indiana Economic Development Corporation
Indiana’s automotive industry isn’t just big, it’s the second largest in the U.S. in terms of GDP. It’s also a reflection of what happens when a state combines its capabilities for advanced manufacturing with a solution-based economy that fuels business growth and innovation. The state’s assets are aligned to position Indiana as a national leader in building some of the best automobiles on the planet.
It starts with foundational assets. Indiana’s inventory of building blocks for auto manufacturing is impressive. The state is home to one of the world’s richest steel producing regions combined with the world’s largest aluminum-lithium plant. These assets are all situated near the logistical center of the United States, with the world’s second-largest Fed-Ex air hub and access to three international ports. Combined, these assets make for a rock-solid foundation for auto manufacturing and distribution.
Add to that an impressive list of technological assets, and you begin to see more than just a great location with a strong supply chain. Indiana is home to the number one and number three engineering universities in the country, is one of five national centers that comprise the Institute for Advanced Composite Manufacturing Innovation, and it’s the only state in the nation to offer a degree in motorsports engineering. Clearly, the state has a deep base of innovators and skilled technicians driving the next generation of products and processes to keep America’s auto industry competitive in the 21st century.
There is another reason why Indiana has emerged as such a trusted ally for auto manufacturers to make the most out of their U.S. operations. On top of the state’s foundational assets, sound fiscal policy achievements are keeping business costs low for an economic future that auto manufacturers can bank on. While other states are raising taxes to pay off mounting public debt, Indiana has spent the last decade paying down its state debt, balancing its budget, creating a surplus and maintaining a AAA bond rating. The result is a state that is passing the savings of efficient government onto its taxpayers. Indiana is cutting corporate taxes .25 percent this year, next year, and every year after that through 2020, with a drop to 4.9 percent in 2021, making Indiana’s corporate tax rate the third lowest in the nation.
Combine economic strength, advanced manufacturing expertise and a top location to efficiently reach the American marketplace, and it’s easy to see why more new automotive jobs and investment are finding their way to Indiana. It’s no wonder Indiana is the only U.S. location to have auto assembly plants for Honda, Subaru and Toyota inside a single state. In fact, when Toyota had the option of selecting any location in the United States to consolidate global Highlander production, it chose Indiana.
Indiana is now producing Highlanders for the global market, which speaks to the level of manufacturing expertise in the Hoosier State. It’s an indicator as to why Japan has maintained Indiana’s sister state relationship for the last 15 years. Japan represents a significant business and ambassador relationship that continues to pay back phenomenal dividends in new jobs and capital investment in the Hoosier State. Likewise, Indiana is a major manufacturing hub, contributing to considerable U.S. sales for Japanese companies. It took an incredible investment in time and resources for Indiana to earn the trust and respect of Japan, and it took decades to develop the level of confidence for Indiana to be seen as one of the top U.S. business destinations of choice for Japanese companies.
Indiana is the only U.S. manufacturing location for Subaru’s North American automotive production, which is further evidence that Japanese companies view Indiana as a known commodity and a safe and profitable location to grow their U.S. operations.
Over 35 countries have a presence in Indiana in every corner of the state. In fact, recent data from the Indiana Business Research Center shows that, between 2012 and 2014, the state had foreign direct investment announcements valued at nearly $5 billion. Manufacturing led the way for foreign investment in Indiana, with 74 percent of all new foreign direct investment job announcements during 2012-2014. In the United States, Indiana leads in manufacturing job growth and has four times more auto-related manufacturing jobs than the national average.
In 2015 alone, Indiana saw several large-scale investment and job-creation projects for its auto industry. In May 2015, General Motors committed to investing $1.2 billion in its 1.3 million-square-foot truck assembly plant in Fort Wayne, Indiana. In September 2015, Subaru announced plans to invest $140 million and create more than 1,000 new jobs at its Lafayette, Indiana plant. In November 2015, NTN Driveshaft committed to growing its Anderson, Indiana plant and adding more than 500 new jobs. Results like these have not only strengthened the Indiana automotive sector, but pushed the state to reaching an all-time employment record with more than 2.6 million Hoosiers employed by the private sector in 2015.
Combining these assets and accomplishments in a single state makes Indiana a logical choice for selecting a location to build and distribute products to the American marketplace. As a result, Indiana’s automotive supply chain has successfully grown to the point that it now delivers a $15 billion impact to the Hoosier economy. With an automotive sector workforce of more than 100,000 and an output that ranks Indiana third in the U.S. for car and truck production, the state has quite a compelling success story to tell.
Delivering a combination of low business costs, fiscal stability and a regulatory environment that encourages growth and innovation is part of that success story. A location that provides easy and efficient access to the American marketplace is another. Access to the leading technology, resources and skilled workforce is the final aspect that has allowed Indiana to emerge as a national leader in the automotive industry.
The fact that the numbers for automotive jobs and investment continue to grow in Indiana is proof that the state has developed a winning combination for business. It shows what a state can accomplish by delivering a comprehensive selection of resources, policy and people to keep its economy strong and growing. It’s what makes it a top choice for the auto industry.
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