American-Made Index: Which Automakers Affect the Most U.S. Workers?
Cars.com's American-Made Index gauges how American a car is on a model-by-model basis, but there are lots of other ways to determine just how American a car is. If you look at raw employment figures, Detroit automakers have a larger footprint in the U.S. than do their foreign-owned competitors — but competition is closing the gap.
Start with the big picture: U.S. assembly and supplier plants employ some 770,000 Americans, according to seasonally adjusted figures from the Bureau of Labor Statistics. That's up from fewer than 625,000 at the bottom of the recession, but it pales in comparison to pre-recession figures, when the industry employed more than 1 million.
When you factor in those who sell cars, you’re talking even more Americans, and that lets brands with no U.S. manufacturing presence still claim a piece of the pie. The BLS reports new- and used-car dealers employ nearly 1.1 million Americans, and it's a more stable source of jobs, fluctuating between 1 million and 1.25 million for most of the past 10 years.
Detroit Three vs. Japanese Three: 181,000 to 67,000
Car dealerships and suppliers often sell cars or furnish parts for multiple automakers. Take them out of the equation, and Detroit automakers have the clear lead in direct employment — at assembly, drivetrain, stamping, casting and tooling plants, research and design facilities, U.S. headquarters, testing grounds and the like. GM spokesman Fred Ligouri says GM employs 77,000 Americans. Chrysler's U.S. employment totals 39,200. Ford declined to provide numbers, but the American Automotive Policy Council, a group that represents the Detroit Three, says the Dearborn, Mich., automaker employs about 65,000.
Combined, that's more than 2.5 times the number of employees that Toyota, Nissan and Honda – the three largest Japanese automakers in the U.S. — employ. Toyota spokeswoman Carly Schaffner says Toyota employs more than 30,000 Americans, up from 29,089 in 2011. Honda has "just north of 26,000" at its U.S. operations, says spokesman Ed Miller. Nissan's U.S. operations employ 10,380 across six states. Hyundai-Kia employs 7,800, according to two spokesmen for the Korean automaker.
It's no wonder the AAPC says that the Detroit Three employ two out of every three autoworkers in the U.S. Indeed, Michigan — home to 38 light-duty auto plants, all partly or wholly owned by the Detroit Three — employs 136,400 automotive workers, according to BLS. The next closest state is Ohio, which has 14 Detroit Three and four Honda plants, with 75,900 autoworkers there.
"We're certainly never going to deny that [the Detroit Three] are global companies in a global marketplace," says AAPC President Matt Blunt. "But they're certainly performing above what one would expect in the United States in terms of employment, in terms of parts, in terms of capital investment."
Others Catching Up
Competitors are catching up. Consider the past decade alone: Miller says Honda "had about 25,000 [or] 26,000" on its U.S. payrolls in the early 2000s, while Schaffner says Toyota employed 30,100 in 2002. That represents roughly even employment over the decade — or, more realistically, recovered momentum since the recession. In 2007, the year before U.S. auto sales went into free fall, Toyota employed nearly 37,000.
Contrast that with the Detroit Three, whose employment may never recover to pre-recession levels. The Center for Automotive Research in Ann Arbor, Mich., says employment at GM, Ford and Chrysler has risen slightly since 2009, but in the early 2000s, the three automakers employed more than double what they do today. In 2001, Ligouri notes, some 168,000 worked at GM alone.
"The Detroit Three have two-thirds of the assembly plants that they had five years ago," says Kristin Dziczek, who directs CAR's Labor and Industry group. As a result, however, Detroit automakers have "a very sharp upward trend in productivity at the same time. So the reinvestment, which has been huge, has really pushed productivity to very high levels."
That's a point AAPC likes to make. The group says that Detroit Three automakers use fewer workers per car assembled, but they employ more overall because of marketing, finance, research and development and other efforts.
Of course, foreign-owned carmakers claim plenty of U.S. investment in product development, too. Toyota says its U.S. operations include five R&D centers and two design facilities. Honda's Miller reckons the automaker's U.S. development facilities employ "several thousand." And Nissan's U.S. design and technical centers have shaped the Altima, Maxima, Xterra and Frontier.
Global Automakers, a trade group that represents Toyota, Honda, Nissan, Hyundai-Kia, Subaru and several foreign-owned niche brands, argues its member companies invested $40.2 billion in the U.S. in 2011. "Last year we produced 34 percent of the 8.7 million vehicles built in the U.S.," spokeswoman Caroline DeLaney says. "That's still a significant portion."
AAPC's Blunt accepts their contributions.
"We really do welcome foreign competition," he says. "We certainly welcome foreign direct investment, and when Americans get a job working for a foreign automaker, that’s great for the community."
But Blunt maintains it's not as much the contributions from Chrysler — the smallest Detroit automaker, which is controlled by Italy’s Fiat — let alone GM or Ford.
"Ford by itself and GM by itself — the fact that they're purchasing alone as many auto parts as all of the Japanese auto companies combined, that's really a pretty telling statistic," he says.
Down the Road
Will employment from foreign-owned automakers ever catch up to domestic automakers? After slashing jobs and cutting production, Detroit carmakers are back in the black. Last spring, GM posted its ninth consecutive quarter of profits, and Ford posted its 11th. Chrysler is on track to outpace its 2011 profits by eight times this year. CAR estimates the Detroit Three will have nearly 200,000 Americans on their payrolls by 2015. That's up more than 20,000 from 2011.
Foreign-owned automakers are adding to their ranks, too. Toyota added 2,000 jobs at a Mississippi plant to build the Corolla compact. Hyundai spokesman Miles Johnson says U.S. employment at Hyundai alone will increase 20 percent this year.
But CAR's Dziczek doesn't see the overall gap closing anytime soon.
"I don't think in five years it changes radically from what it is," she says. "There's not a lot of talk about opening up new [foreign-owned] capacity."