2005 Rankings Report
Concentrated Automotive Power
Traditional states have been joined by a few Southeastern states in our measurement of automotive influence.
Following on last year’s Automotive Power Centers rankings, we tweaked the ranking criteria a bit to reflect more on automotive employment, taking wages out of the equation. This year, we looked only at auto-dependent workers as a percentage of the state workforce; auto-related employment; and number of automotive facilities in the state. Each of these three factors counted equally.
Our data was taken from what is reported by the Alliance of Automobile Manufacturers (which in turn got its data from the “2004 Ward’s Motor Vehicle Facts & Figures” data book). A few definitions: Auto-dependent jobs can include independent repairers, vehicle shipping services, the aftermarket industry, car wash employees, tow truck drivers, rental car employees, and other employment that is dependent on the auto industry. Looking at these jobs as a percent of the workforce gives a general idea of how auto-oriented the workforce is. Auto-related jobs include suppliers of parts and components, suppliers of raw materials, and support services such as advertising and engineering consultants. Finally, when we say we looked at the number of automotive facilities, we mean everything from final assembly plants to parts distribution, corporate offices, research and development, sales and marketing centers, financial centers, and engineering and design facilities.
The results still favor Michigan and California. The fact is that despite the gains in the automotive industry seen by other parts of the country over the last decade, Michigan is still by far the nexus of automotive experience in this country. The state has figured out how to level the playing field so that it will continue to get its share of U.S. automotive investment, most notably through Gov. Jennifer M. Granholm’s six-point automotive economic development plan unveiled last year.
“Michigan is a global center for both halves of the automotive equation—research and production,” says Granholm. “In the future, it’s that high-tech research and development that will fuel not just the nation’s auto industry, but the growth of Michigan’s economy as well.”
Toyota’s announcement in April could be seen as a vote of confidence in the six-point plan; the company announced it will spend $150 million initially to create research and development facilities in York Township, MI, creating 400 jobs. The company is receiving $38.9 million worth of various incentives.
It’s interesting to note that since this ranking tends to favor states with the longest history in the automotive industry, there are still hot states from the Southeast in the top 10: Georgia, Kentucky, and Tennessee. While none of these states has been in the news recently the way that, say, Alabama has with its Hyundai plant, or Mississippi with Nissan, there are nonetheless high concentrations of automotive talent and facilities there. Ford and GM have plants in Georgia; Ford and Toyota have plants in Kentucky; and Saturn and Nissan have plants in Tennessee.
Even with a major assembly plant, it still requires a lot of secondary business and supplier plants to make our ranking, and these Southeast states are likely to continue to rise as the automotive industry in the region grows.
