1. Changes in Michigan Automotive Industry Employment Bernard Swiecki Industry Analyst Economics and Business Group Center for Automotive Research February 28, 2002

2. Contribution of the Auto Industry to the U.S. Economy in 1998: The Nation and Its Fifty States Performed by CAR for the Alliance of Automobile Manufacturers Winter 2001

3. 1998 Vehicle Firm Employment and Payroll by State

4. 1998 Automotive Compensation per Employee Source: Company surveys 29,776 66,584 61,537 76,905 25,951 31,647 0 20,000 40,000 60,000 80,000 100,000 120,000 SalariedHourlyTotal Compensation Avg. PayrollAvg. Benefits $102,856 $93,184 $96,360

5. 1998 Michigan Automotive Employment: Alliance Study Vehicle Firms: Manuf. Supplier Empl.: New Dealer Empl.: Dealer Supplier Empl.: Spin-off Empl.: Total Empl.: Total Compensation 260,400274,40028,90021,700422,1001,007,500 $44.7 bil.

6. 1998 Michigan Automotive Employment - Survey Vehicle Firms: Parts and Component Firms: Pre-production Firms: Other Manufacturing: Business Services: Wholesale Trade: 260,444119,64388,332???

7. Jobs Contributed Across the 50 States Michigan Ohio California Illinois Missouri South Dakota Alaska 1,007,500 630,800 462,900 311,900 221,200 14,000 4,600

8. 1996 Value Added per Employee Source:U.S. Census Bureau, 1999 Statistical Abstract of the United States, p. 748. Apparel and other textile products Furniture and fixtures

9. Big 3 U.S. Employment 623,133 380,682 442,708 164,344 137,264 72,320 10.4% 23.7% 30.2% 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 859598 Year 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% HourlySalariedSalaried Percent of Employment Source: Company Reports Employment Percent Salaried

10. Big 3 Michigan Employment Source: Company Reports Employment Percent Salaried

11. Michigan: The High Technology Automotive State Performed by CAR for the MEDC April, 2000

12. R & D Spending by Industry - 1997 Motor Vehicle is 1st of 39 Major U.S. Industries Motor vehicles & motor vehicle equipment Office, computing, & acctg. machines Drugs and medicines Computer & data processing services Electronic components Trade Communication equipment Aircraft & missiles Other machinery, except electrical Optical, surgical, photographic & other inst. Source: National Science Foundation/SRS, Survey of Industrial Research and Development: 1997

13. States Ranked by Industrial Research & Development - 1997 Michigan Ranked 2nd of the 50 States MICHIGANMICHIGAN CALIFORNIA NEW JERSEY MASSACHUSETTS WASHINGTON ILLINOIS NEW YORK TEXAS PENNSYLVANIA OHIO Source: National Science Foundation

14. Engineers, Math and Computer Scientists Engineering Technicians Science Technicians Computer Programmers High-Tech Occupations

15. Big Three Technology Employment Questionnaire Results Total 1998 Auto Employment High-Tech Auto Employment 492,887 47,548 U.S. 235,807 37,489 Michigan 47.8% 78.8% Michigan %

16. 1998 Big Three Technology Employment Questionnaire Results 492,887 (U.S.) 47,548 (U.S) MichiganAll other states

17. 1998 Big Three Technology Employment Questionnaire Results High-Tech Employment as Percentage of Total Auto Employment 3.9% Other states 15.9% Michigan

18. 1998 Big Three Technology Employment Questionnaire Results Michigan Other states

19. Well, the Unemployment Rate is Only 5.6%...and Things are Looking Up...by Summer But 1.2 million Americans have been forced into part time work And 20-25% of Tooling and Small Manufacturing Firms will fail by summer Wages are falling, Pensions are Disappearing, and Health Insurance for the Nation may be seriously reduced... No Investment...And a Record Trade Deficit

20. 1.6 Million Jobs Gone! Manufacturing Jobs and the Trade Deficit: 1980-2000 $-449.5 bil. $-25.5 bil. 14.2 mil. 12.6 mil.

21. Manuf. Wages Fall as the Deficit Rises! 1980-2000

22. No Connection Between Productivity and Growth in Manuf. Wages: 1981-2000

23. Premium for Automotive Labor? Relative Auto Wages 1959 - 2000 $2.80 66% $24.59 $14.84 28% $2.19 Source: BLS

24. 16 ¢/Hr. in India! 1998 and 1995 Total Compensation/Hr. for Motor Vehicle Manuf. Production Workers in Selected Countries

25. Where Did 400,000 Jobs Go? U.S. Auto Parts Imports 1990 – 2001 Billions of Current Dollars Source: USDOC/ITA

26. International Automotive Supplier and Manufacturer Locations International Automotive Supplier and Manufacturer Locations NISSAN-CANTON Alabama Mississippi MERCEDES-VANCE HONDA-LINCOLN

27. New International Assembly Facilities 2001-2003 New International Assembly Facilities 2001-2003 BMW-Expansion Honda-Odyssey Odyssey-Engine Mercedes-Benz- Expansion Nissan-Truck Nissan-V8 Engine TMM-Indiana Expansion Toyota V8 Engine New Vehicle Total Spartanburg, S.C. Lincoln, AL Vance, AL Canton, MS Decherd, TN Gibson County, IN Huntsville, AL 1,400 2,000 ? 2,000 4,000 1,000 2,000 350 ? $600 $935 $600 $800 ? 60,000 120,000 120,000 eng - 80,000 200,000 ? 860,000 New Employment New Capacity Investment ($ Millions) LocationCompany

28. International Automotive NA Truck Incremental Capacity 1.0 million units VW AAC +75K; MB Tall Wag +50K Sienna +25K; Highlander +75K; Scenic +50K Nissan FS PU +100K, SUV +50K, I/SUV +25K Quest +25K; Honda FS PU +100K, FS SUV +50K Toyota Matrix +75K; RX300 +50K Tracker –50K; Honda MAV +75K; Odyssey +50K Honda SUV +100K; Subaru ST/X +25K 2.1 million units 2001 2002 2003 2004 2005 2006 Source: CSM Worldwide

29. A Few Conclusions Michigan has done well in attracting high paying, desirable automotive employment, but… Needs to do better in attracting it from foreign vehicle firms and suppliers Despite impressive productivity improvements, manufacturing jobs have suffered