Foreign automakers have major impact on U.S. economy 1.3 million employed at their U.S. plants

March 31, 1998|By Ted Shelsby | Ted Shelsby,SUN STAFF

Since the opening of the Honda assembly plant in Marysville, Ohio, in 1982, the international automobile sector has grown into a major force in the U.S. economy, accounting for 1.3 million jobs and total compensation of close to $50 billion a year.

This was the conclusion of a study released yesterday by the University of Michigan's Office for the Study of Automotive Transportation.

David E. Cole, director of the study group, said he was surprised at the impact on the U.S. economy from such auto manufacturers as Honda, Toyota, Land Rover, Nissan, Volvo and Volkswagen, and said he hoped the information would be used to educate government officials in determining policy related to trade, regulations and economic development.

"This is an important industry," Cole said in a teleconference from Detroit. "It is an industry that is a part of our economy. It's here to stay.

"As we look at numbers like compensation and employment, we need to pay attention to this industry and give it, perhaps, some more respect than we have in the past," Cole said.

"It's not going to go away. It is part of our lives as we step into the future."

The study noted that 69,000 Americans are directly employed in manufacturing and support for the international automakers with U.S. plants.

It reported that 334,000 people work in dealerships and another 870,000 U.S. jobs are a spin-off of the industry's presence in this country.

Cole noted that the report focused only on the industry's economic impact on the United States and did not include Canada.

Local benefit

While Maryland is not home to any international auto assembly plants, it has benefited from the industry's growth.

Central Atlantic Toyota Distributors Inc., the Glen Burnie-based distributor of Japanese cars, employs 144 and has a payroll of more than $7.6 million, according to Martha Boss, a spokeswoman for Toyota Motor Sales U.S.A.

She said Toyota's processing center in the port of Baltimore has 16 workers and a payroll of $895,000.

"There's more," Boss added, noting that a tannery in Williamsport ships leather for seats to a Camry plant in Georgetown, Ky., and a Toyota Motor Credit Corp. office in Baltimore has 47 workers and a payroll of $1.7 million.

Sara Moriarty, a spokeswoman for the port, said auto imports and exports account for 733 of the port's 18,000 employees.

Land Rover North America Inc., the Lanham-based distributor of the British sport utility vehicle, has 200 employees and distributed more than 23,000 vehicles last year valued at $997 million.

In its study, "The Contributions of the International Auto Sector to the U.S. Economy," the researchers found that within the manufacturing sector alone, every international auto sector job generates another 5.5 jobs.

This is higher, the researchers said, than the spinoff of other significant high-tech manufacturing industries such as computers, telecommunications, and audio and video equipment.

The study, "The Contributions of the International Auto Sector to the U.S. Economy," said that the international auto sector is now the fastest-growing segment of the motor vehicle industry.

Since 1986, U.S. sales of American-built international vehicles have risen nearly 500 percent, while U.S. sales of imported vehicles have steadily fallen.

Sean P. McAlinden, a researcher at the university and one of the authors of the study, said the U.S. plants of international automakers now account for more than one of every five cars sold in this country.

Other findings of the study, which was prepared for the Association of International Automobile Manufacturers Inc., include:

The U.S. plants of the international automakers, compared with the U.S. auto industry as a whole, enjoy labor productivity advantages of 26 percent in assembly of vehicles, 44 percent in assembly of engines and 80 percent in production of major component stampings.

The domestic content (the percentage of U.S.-made parts) of international plants has steadily risen to 69.3 percent, compared with 77.6 percent for traditional domestic vehicles.

Pub Date: 3/31/98

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