For a few years, steady growth in auto manufacturing helped prop up regional economies recovering from the recession. But new data indicate that the industry’s momentum has stalled.
Vehicle sales declined for the sixth consecutive month in June, and automakers are responding. Ford announced plans in May to trim 10 percent of its salaried workforce in North America and Asia. Similarly, General Motors and Fiat Chrysler have eliminated shifts at some facilities.
Automakers have played a critical role in the larger manufacturing sector’s recovery since it bottomed out in early 2010. In fact, a Brookings Institution analysis finds that the auto industry was responsible for 60 to 80 percent of total manufacturing growth over the 15-month period ending in March.
Given that auto manufacturing has served as one of the few bright spots across the manufacturing sector, new indications of accelerating job losses could spell trouble for regional economies where automakers and parts suppliers are major employers.
We’ve compiled U.S. Department of Labor data highlighting such regions. The federal Quarterly Census of Employment and Wages reports data for three industries closely associated with auto manufacturing, and the following 25 metro areas reported the highest tallies in those industries as of December:
|Metro Area||Total||Vehicle parts manufacturing||Vehicle body/trailer manufacturing||Vehicle manufacturing|
|Dallas-Fort Worth-Arlington, TX||10,533.0||9,518||1,015|
|Los Angeles-Long Beach-Anaheim, CA||9,793.0||6,900||2,244||649|
|San Antonio-New Braunfels, TX||8,753.0||4,763||320||3,670|
|Louisville-Jefferson County, KY-IN||7,553.0||7,553|
|Atlanta-Sandy Springs-Roswell, GA||6,959.0||6,230||729||0|
|Battle Creek, MI||6,067.0||6,067|
|Riverside-San Bernardino-Ontario, CA||4,875.0||2,565||1,852||458|
|Ann Arbor, MI||4,100.0||4,100|
|Buffalo-Cheektowaga-Niagara Falls, NY||4,021.0||4,021|
|Kansas City, MO-KS||3,942.0||3,797||145|
|Bowling Green, KY||3,854.0||3,854|
SOURCE: Governing calculations of BLS Quarterly Census of Employment and Wages, December 2016 estimates (Data was not reported for some metro areas. These numbers also don’t include all related employers that do business with auto manufacturers.)
Nationally, auto manufacturing employment grew last year by just over 2 percent. The Detroit region, which employs by far the most workers in the auto industry, experienced a slight increase of about 3,000 employees over the 12-month period ending in December. Atlanta and Knoxville, Tenn., are among other regions with notable upticks in hiring.
The Charlotte, N.C., area, meanwhile, shed nearly 12 percent of its workforce.
Here’s how auto manufacturing employment fluctuated over the 12 months ending in December across select metro areas with significant employment in the industry:
|Metro Area||Change||December 2016 Jobs||December 2015 Jobs||BLS Industries Included|
|Detroit-Warren-Dearborn, MI||3.0%||102,131||99,114||Vehicle parts manufacturing, Vehicle body/trailer manufacturing, Vehicle manufacturing|
|Elkhart-Goshen, IN||7.6%||31,633||29,404||Vehicle parts manufacturing, Vehicle body/trailer manufacturing|
|Knoxville, TN||17.5%||8,133||6,921||Vehicle parts manufacturing, Vehicle body/trailer manufacturing|
|Atlanta-Sandy Springs-Roswell, GA||15.1%||6,959||6,048||Vehicle parts manufacturing, Vehicle body/trailer manufacturing|
|Cincinnati, OH-KY-IN||7.5%||10,966||10,204||Vehicle parts manufacturing, Vehicle body/trailer manufacturing|
|Kansas City, MO-KS||16.0%||3,942||3,397||Vehicle parts manufacturing, Vehicle body/trailer manufacturing|
|Dallas-Fort Worth-Arlington, TX||4.7%||10,533||10,064||Vehicle parts manufacturing, Vehicle body/trailer manufacturing|
|Indianapolis-Carmel-Anderson, IN||4.6%||9,599||9,180||Vehicle parts manufacturing, Vehicle body/trailer manufacturing|
|Los Angeles-Long Beach-Anaheim, CA||3.0%||9,793||9,512||Vehicle parts manufacturing, Vehicle body/trailer manufacturing, Vehicle manufacturing|
|Chicago-Naperville-Elgin, IL-IN-WI||2.1%||12,186||11,939||Vehicle parts manufacturing, Vehicle body/trailer manufacturing|
|Louisville-Jefferson County, KY-IN||3.1%||7,553||7,323||Vehicle parts manufacturing|
|Jackson, MI||1.7%||2,883||2,836||Vehicle parts manufacturing|
|Kokomo, IN||0.3%||10,343||10,311||Vehicle parts manufacturing|
|Nashville-Davidson, TN||0.3%||9,144||9,118||Vehicle parts manufacturing|
|Riverside-San Bernardino-Ontario, CA||-0.3%||4,875||4,888||Vehicle parts manufacturing, Vehicle body/trailer manufacturing, Vehicle manufacturing|
|Ann Arbor, MI||-1.6%||4,100||4,167||Vehicle parts manufacturing|
|Columbus, OH||-0.9%||9,201||9,287||Vehicle parts manufacturing, Vehicle body/trailer manufacturing|
|Columbus, IN||-2.9%||4,676||4,816||Vehicle parts manufacturing|
|Buffalo-Cheektowaga-Niagara Falls, NY||-4.3%||4,021||4,200||Vehicle parts manufacturing, Vehicle body/trailer manufacturing|
|Charlotte-Concord-Gastonia, NC-SC||-11.5%||6,439||7,273||Vehicle parts manufacturing, Vehicle body/trailer manufacturing|
Figures compare December 2015 and December 2016 total employment for all three industry classifications with available data. Areas without comparable data for both months were excluded. SOURCE: Governing calculations of BLS Quarterly Census of Employment and Wages data Recent indicators for 2017, particularly declining auto sales, suggest more regions will experience losses this year. Brookings’ Mark Muro views the job declines as a normal slowing after an extended period of growth. “For the next year or two," he says, "it might be a less reliable source of manufacturing jobs.”
A few segments of the industry are faring better. Sales of trucks and SUVs are up from last year, and Tesla just announced the hiring of more than 1,000 technicians as it rolls out its highly anticipated Model 3 electric vehicle.
Still, few other areas of manufacturing have shown signs of life. The latest federal estimates for June indicate there were 12.4 million total manufacturing workers nationwide, about the same as two years ago. Unless other large segments of manufacturing begin hiring, such as chemical, electronics or plastics manufacturing, the auto industry's slowdown is likely to act as a major drag on the sector's overall growth.
About the Data
The Quarterly Census of Employment and Wages does not report total auto manufacturing jobs, but rather estimates for narrower related industries. The three industries referenced in this report include motor vehicle parts manufacturing (NAICS 3363), motor vehicle body and trailer manufacturing (NAICS 3362), and motor vehicle manufacturing (NAICS 3361). Many regions not listed also support significant auto manufacturing employment. Job estimates were unavailable for these areas, either because the Labor Department suppresses the totals or there were no workers. Figures refer only to private-sector employment.