Labor

Americans Still Make Cars

Jobs report shows the auto industry is holding up better than other manufacturers.

Shut the front door.

Photographer: Luke Sharrett/Bloomberg

Makers of motor vehicles and parts employed an estimated 926,100 people in the U.S. in October (seasonally adjusted), according to Friday's jobs report from the Bureau of Labor Statistics. That's pretty much unchanged from 926,200 in September, up from 922,000 in October 2015, and way up from a low of 623,300 in the depths of the recession in June 2009.

Yes, the number has been much higher in the past:

Working at the Auto Plant

U.S. employment in motor vehicle and parts manufacturing*

Source: Bureau of Labor Statistics

*Seasonally adjusted

But compared with the manufacturing sector as a whole, the motor vehicle industry (cars and trucks, basically; farming and construction equipment are in a different category) has held up relatively well. 1

Doing Better Than the Rest of Manufacturing

Employment as a percentage of 1990 average

Source: Bureau of Labor Statistics

This is in part because the vast majority of cars and light trucks bought in the U.S. are still made in the U.S.

Still Buying (Mostly) American

Domestic-made share of U.S. auto sales

Source: Bureau of Economic Analysis

The domestic share tends to fall when gasoline prices are high and compact cars are in vogue, and rise when gas prices are low and sport utility vehicles and pickups are hot. But overall it's about where it was in the 1980s. One reason is that, since the 1980s, foreign auto manufacturers have shifted production to the U.S. in a big way. I'm headed out later this morning to the 15-year-old facility about 40 miles east of Birmingham, Alabama, where Honda makes Odyssey minivans, Ridgeline pickups, and Pilot and Acura MDX SUVs. Alabama is also home to Mercedes and Hyundai auto-assembly plants and a Toyota engine plant. Other states (mainly Southeastern states) have attracted other foreign brands.

Foreign automakers built these facilities on U.S. soil in part to be closer to American consumers and their unique tastes in automobiles. But saber-rattling by U.S. politicians angered by the rise of Japanese imports in the 1980s played a role, too -- Japanese companies didn't want to risk losing access to the U.S. market, so they started building cars here.

It's a case where tough talk on trade, and actual tariffs, seem to have preserved jobs. On the other hand, the U.S. has been losing out to Mexico in some recent plant-location decisions in part because Mexico has more free-trade agreements that allow manufacturers there to ship duty-free to other countries. Sometimes trade barriers preserve jobs, sometimes they don't.

(Corrects month in which 926,200 people were employed in the motor vehicle industry in the first paragraph.)

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

  1. I used the 1990 average as my baseline instead of just starting at January 1990, the first available month of data, because there was a temporary shutdown of many Ford and General Motors plants that month that would have skewed the chart to make the motor vehicle industry's subsequent jobs performance look better than it really was.

To contact the author of this story:
Justin Fox at justinfox@bloomberg.net

To contact the editor responsible for this story:
Stacey Shick at sshick@bloomberg.net

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