MEMA: Moving America. Part by Part.


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Motor Vehicle Parts Suppliers have a tremendous impact on the US Economy. This booklet highlights that impact .

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MEMA: Moving America. Part by Part.

  1. 1. Moving America. Part by Part. MOTOR VEHICLE PARTS SUPPLIERS WWW.MEMA.ORG
  2. 2. Building the Foundation for Transportation. Part by Part. Transportation is essential to our way of parts and accessories. Safe, efficient sector in the United States, directly life in this country. We drive to work, transportation is essential to keeping employing nearly 686,000 individuals take our children to school, and run our economy moving. across the country and contributing to errands. We take buses across city streets more than 3.29 million jobs. Without It is the parts in a vehicle that make it the contributions of the nation’s parts safe and economical to use. The next suppliers, domestic vehicle manufacturing time you sit in your car, think for a minute and maintenance would almost certainly about what is inside – the instrument 2/3rds panel, audio system, overhead consoles, grind to a halt, adversely affecting the way we drive and go about our daily lives. climate control system, seats and other components. Think about what makes your car safer and more fuel-efficient – Parts suppliers manufacture over airbags, seatbelts, headlights, brakes, two-thirds of the value in today’s and time zones. We buy groceries that catalytic converters, tires. You begin to vehicles. were delivered to our neighborhood store understand that the car is really the sum by commercial trucks. We maintain our of its parts. In fact, more than two-thirds vehicles with a broad range of services, of the value in today’s vehicles and the majority of parts used 686,000 to service your vehicle over its lifespan are produced by parts suppliers. x 4.8 Direct workers in the United States Parts suppliers are the backbone of the vehicle manufacturing Additional indirect jobs contributed industry and the country’s manufacturing 3.29 Million Total number of jobs the industry impacts base. The industry constitutes the largest manufacturing M OTO R V EH I CL E PA RT S SU PP L I ER S
  3. 3. Building a 686,000 Person Industry. Part by Part. Collectively, U.S. motor vehicle parts and sell finished components, such as suppliers. Each tier depends on the suppliers are a $388-billion industry, transmissions, seats and instrument financial health of the other tiers for its comprising three distinct segments: panels directly to the vehicle survival. Ultimately, all suppliers depend original equipment, heavy duty manufacturer. Tier 2 suppliers sell parts on the financial health of the domestic and aftermarket. like transmission gears, electronics, and foreign vehicle manufacturers at the top of the supply chain pyramid. $388-Billion Industry Given this illustration, it is easy to see the interdependency of the entire vehicle manufacturing industry. Collectively, the motor vehicle parts supplier industry is a $388-billion industry in the U.S. HEAVY DUTY LIGHT VEHICLE ORIGINAL speedometers and seat covers to the Passenger cars share the road with VEHICLE MANUFACTURER EQUIPMENT (OE) Tier 1 suppliers. Tier 3 suppliers provide commercial vehicles like medium- and raw materials to either of the other heavy-duty trucks, which are used Original equipment suppliers TIER design, engineer and to move the vast majority of goods 1 in the United States. Additionally, we FINISHED COMPONENTS manufacture parts required depend on school and transit buses for the assembly of passenger and emergency vehicles to operate in a TIER cars and light trucks. OE suppliers 2 interact directly with vehicle safe and efficient manner. Heavy-duty PARTS suppliers provide the original equipment manufacturers, and their success parts used to manufacturer commercial is tied directly to the number of TIER vehicles and aftermarket replacement 3 domestically produced vehicles. RAW MATERIALS parts needed to maintain the vehicles Each year, more than 300 new in service and on the road. Heavy- The Original Equipment light vehicle models are sold in sector is often divided duty suppliers are also responsible for into levels or tiers. the U.S. – and each model contains Given this illustration, developing most of the technologies that it is easy to see the 8,000 to 12,000 parts or components. interdependency of keep these vehicles safe. the entire vehicle The OE sector is often divided into manufacturing industry. Due to shipping costs and vehicle size levels or tiers. Tier 1 suppliers provide and weight, most heavy-duty vehicle full design and engineering support M OTO R V EH I CL E PA RT S SU PP L I ER S
  4. 4. AFTERMARKET SALES BY CHANNEL generating freight ton- 27% Original Equipment (OE) service Aftermarket Sales by Channel; miles demand. Supplier Joint Motor Vehicle 16% General automotive repairs Aftermarket Channel success is impacted Forecasting Model 12% Paint, body & interior repairs by economic cycles, changing manufacturer 10% Automotive parts & accessories demands, production 6% Dealers schedules, tight credit 4% Warehouse clubs & superstores markets, and new diesel 3% Car washes emission-reduction 3% Gasoline stations without convenience stores requirements that have 3% Automotive oil & lube shops caused both spikes and steep drops in demand. 2% Gasoline stations with convenience stores 14% All other channels AUTOMOTIVE MODE TONS VALUE TONS VALUE (MILLIONS) (BILLIONS) AFTERMARKET ALL MODES, 19, 487 $13,052 100% 100% TOTAL U.S. aftermarket suppliers support the perform their own Truck 11,712 9,075 60% 70% light-, medium- and heavy-duty vehicle vehicle maintenance. Rail 1,979 392 10% 3% markets. The aftermarket segment includes Considering how many oil Water 1,668 673 9% 5% the manufacturing, remanufacturing, changes, brake jobs, batteries, Air (including 6 563 0% 4% truck and air) distribution, retailing and installation of filters, hoses, belts and tires Pipeline 3,529 896 18% 7% all vehicle parts, chemicals, tools, a vehicle requires in its lifetime, Parcel, U.S. 27 1,022 0% 8% Postal Service, or courier equipment and accessories necessary to it is easy to see why the Other multiple 567 430 3% 3% keep the vehicles on our roads operating $244-billion aftermarket and unknown Value of Freight modes Shipped by Mode safely and efficiently. segment is steadily growing. Trucks are responsible part manufacturing remains in the Most aftermarket repair work takes place for 70% of the value and 60% of the ton- United States. As with the light-vehicle in a vehicle manufacturer’s dealership nage of commercial freight in the United OE market, suppliers are generally service facility or an independent repair States. divided into three tiers. This industry shop. There is also a strong “do-it- is dependent on a healthy economy yourself” market – individuals who
  5. 5. Supporting Jobs in Our Communities. Part by Part. The motor vehicle parts supplier industry are located in other Great Lakes states, EXPENDITURE- EMPLOYMENT INTERMEDIATE INDUCED is the U.S.’s largest manufacturing sector, 28 percent are in the South, and the Manufacturing 145,100 235,200 employing 686,000 workers. In turn, remaining 11 percent are in other regions Metals, Minerals, Machinery 35,200 65,300 every direct job with a parts supplier (see chart below). Fabricated Metal Prod. Mfg. 44,700 43,600 contributes to an additional 4.8 jobs, Motor Vehicle Mfg. 14,500 7,100 Most of the supplier industry’s growth in Plastics, Rubber Prod. Mfg. 16,200 15,100 meaning that the industry supports recent years has taken place in the South. Electrical or Computer Products 3,200 20,700 more than 3.29 million As foreign-owned vehicle manufacturers Other Manufacturing 31,300 83,400 jobs in total. established plants in states like Kentucky, Non-Manufacturing 753,000 1,466,600 Professional, Tech Services 141,200 86,300 Tennessee, Alabama, Mississippi and Mgmt. of Companies, Enterprises 35,800 18,200 South Carolina, their suppliers followed. Admin., Waste Services 145,500 34,900 Sixty-seven percent of the parts plants Wholesale Trade 83,000 60,400 located in the South opened between Retail Trade 75,900 220,000 1980 and 2006, now constituting a Transp., Warehousing 52,600 83,100 Finance, Insurance 54,000 72,000 significant part of the economy of Other Services (excl. Govt) 142,600 618,600 Southern states. Other Non-Manufacturing 22,800 273,100 11% TOTAL 898,500 1,701,800 Other Of the 3.29 million Regions Intermediate and 25% jobs supported Expenditure-Induced Employment TOP STATES FOR DIREC T JOBS Supplier Michigan 50,000 -100,000+ by motor vehicle 25,000 -50,000 operations are 28% suppliers, close to 10,000 -25,000 South 5,000 -10,000 often one of the one-third are related 1,000 -5,000 36% largest employers in Great Lakes to manufacturing. 0 -1,000 States Importance of Parts Suppliers small communities, In addition, the to Local Manufacturing. Counting only direct making parts suppliers complexity of the motor employment, parts suppliers the foundation of hundreds vehicle itself requires a large are the largest manufacturing sector in eight states: Indiana, of communities across the country. Kentucky, Michigan, Missouri, range of raw materials – including steel, Ohio, Oklahoma, South Carolina and Tennessee. Suppliers support a vast network of plastics, non-ferrous metals and rubber. operations that stretches from coast Over 290,000 people in these and other to coast. While 25 percent of supplier industries depend upon a competitive facilities are in Michigan, 36 percent U.S. motor vehicle supplier industry. M OTO R V EH I CL E PA RT S SU PP L I ER S
  6. 6. Sustaining Our Environment. Part by Part Suppliers have consistently demonstrated • Clean Diesel Engines. Clean diesel can safety, durability or comfort. For every a commitment to advancing technologies provide 30 to 35 percent better fuel 10 percent eliminated from a vehicle’s and practices that will secure a economy and generally emits 25 percent total weight, fuel economy improves sustainable environment through product less greenhouse gas than gasoline. by seven percent. innovation and more environmentally Additionally, diesel engines offer more friendly manufacturing operations. power and greater acceleration than gasoline engines. VEHICLE AND ENGINE TECHNOLOGIES • Direct Fuel Injection Systems. Direct fuel The industry has worked injection systems work by first reducing with its customers and fuel to a fine spray, then injecting developed a wide range it directly into an engine’s cylinders of new technologies without first mixing with incoming air. that promote fuel Greater fuel economy is achieved as the efficiency. Most of these technology allows fuel to burn more technologies, with a few efficiently. exceptions, are available • Fuel Cell Technology. Fuel cell vehicles for both passenger vehicles create their own electricity and are and heavy-duty vehicles, including: propelled by an electric motor, resulting • Batteries and Engines for Hybrid in low or no emissions. Though not Vehicles. Hybrid vehicles convert the likely to be widely available in the energy normally wasted during coasting near term, fuel cells represent an and braking into electricity. This energy enormous opportunity and an important is stored in a battery until needed by technological advance. the electric motor. Some hybrids also • Lightweight Materials. By using automatically shut off the engine when lightweight materials such as aluminum, the vehicle comes to a stop and restart plastic and other composite materials, it when the accelerator is pressed, manufacturers can build more fuel- preventing wasted energy from idling. efficient vehicles without sacrificing
  7. 7. • Innovative Glass. Advances in glass while fixing a serious maintenance vehicles and construction materials. technology allow for cooler vehicle problem can improve your mileage by Additionally, suppliers who interiors, which reduce the demand as much as 40 percent. These repairs remanufacture vehicle parts and for air conditioning, resulting in can take a variety of forms. components have cut down on increased fuel economy and reduced • Replacing clogged air filters protects energy use, waste disposal and greenhouse gas emissions. the engine and can improve mileage capital and labor inputs. Through • Anti-Idling in older vehicles by as much as remanufacturing, products that Technology. 14 percent. are worn, imperfect or discarded Aimed specifically are brought to a manufacturing • Performing regular engine tune-ups at commercial environment where they are cleaned and vehicle maintenance checks vehicles, anti- and checked. Reusable product improves efficiency because worn idling technology parts are brought up to factory or spark plugs, dragging brakes, low reduces the need performance specifications; parts transmission fluid and transmission for drivers to idle that cannot be reused are replaced. problems can all hinder fuel their engines Remanufacturing preserves the economy. on long-haul value of the original manufacturing • Keeping tires properly inflated and trips. Anti-idling – including energy costs and waste aligned can improve mileage by more technology can reduce idling fuel than three percent. consumption by 60 percent and greatly reduce idling emissions. RECYCLING VEHICLE PARTS AND MATERIALS VEHICLE MAINTENANCE Recycling is critical for suppliers. The One simple key to conserving fuel lead and plastic casings in vehicle and reducing emissions is regular batteries are recycled to make new vehicle maintenance. According to the batteries. Used oil filters are recyclable U.S. Department of Energy, vehicle because they are made of steel and maintenance and repair can improve can be reprocessed into new steel mileage by an average of 4 percent, products, such as cans, appliances, M OTO R V EH I CL E PA RT S SU PP L I ER S
  8. 8. ACCOUNTING FOR THE a supplier company in upstate New York CARBON FOOTPRINT recycles approximately 100,000 gallons Many suppliers adhere to strict product of rainwater annually. The rainwater is stewardship guidelines. Stewardship collected from its 10,000-square-foot involves thinking about a product’s roof and stored in cooling towers used to lifecycle – from the raw materials that go transfer heat generated from the plant’s into a product to how a product, at the air compressors. end of its service life, can be reused or disposal – which recycling alone cannot recycled. Companies are also increasing do. Remanufacturing also provides a the use of renewable raw materials, number of benefits to the economic and such as natural rubber and plant-based environmental well-being of this country, oils and biofuels. Other innovations including domestic job creation and include conserving basic resources at extending the useful life of consumer manufacturing facilities. For example, products at a good value.
  9. 9. Supplying Safety Innovation. Part by Part. Motor vehicle parts suppliers are responsible stability control (ESC), mandated by NHTSA for accidents, or running off the road or out of the for more than two-thirds of the value of a new all passenger cars and light trucks beginning lane as the critical event that caused more than vehicle. In 2006, suppliers were responsible with the 2009 model year. ESC is a system 60 percent of these accidents. Brake problems for nearly 30 percent of the total $16.6-billion that uses sophisticated sensors to detect and were a factor in 30 percent of these crashes. automotive research and development prevent skids or loss of control by automatically Continually challenged to provide innovation investment and are providing much of the adjusting individual brakes to safely reposition that will reduce accidents, suppliers play a key intellectual capital required for the design, testing the vehicle on its intended course. Suppliers role in developing technology to address these and engineering of new parts and systems. are also responsible for safety advancements “critical event” concerns. New technologies like adaptive cruise control, advanced all- include brake stroke monitoring, collision wheel drive systems, blind zone management ADVANCED SAFETY warning, lane departure warning, and stability systems, collision detection systems, mirror TECHNOLOGIES control. The industry is working with Congress to displays and side alert detectors. All these develop a tax incentive for the purchase of these Suppliers play a critical systems are designed to respond to consumer technologies to spur their use. role in the advancement demand and make vehicles safer. of vehicle technologies and will continue to drive PROTECTING INNOVATION initiatives that reduce HEAVY TRUCK SAFETY TECHNOLOGIES Additionally, it is very important for suppliers critical safety problems Suppliers are also developing the technology to protect their innovation. According to on America’s roads. Two that keeps heavy-duty trucks and other private-sector estimates, parts suppliers lose of the most well-known commercial vehicles safe – a tremendously an estimated $12 billion worldwide and $3 safety innovations are important task given the volume of trucks on billion domestically in sales annually to product seatbelts and airbags, the roads. According to the U.S. Department counterfeiting. Counterfeit parts also present which combine to save countless lives every of Transportation, there were more than a potential safety concern. The supplier day. Suppliers work very closely with the 4,800 fatalities and nearly industry is working with National Highway Traffic Safety Administration 84,000 injuries resulting from Congress and Administration (NHTSA) and the Federal Motor Carrier Safety accidents involving heavy- officials to promote legislation Administration (FMCSA), the government duty vehicles in 2007. FMCSA that would improve anti- agencies that regulate vehicle safety. and NHTSA have identified counterfeiting efforts. One of the newest safety advances is electronic rear-end collisions, sideswipe M OTO R V EH I CL E PA RT S SU PP L I ER S
  10. 10. Trillions of Miles Driven, and Still Moving. Americans drive an astonishing three trillion vehicle miles per year. There is little that we can accomplish without driving. From our daily commute to our weekend getaways, from safely moving commerce to safely driving our children to school; we depend on reliable, safe and efficient transportation. Motor vehicle suppliers design, engineer and manufacture the quality parts that fulfill our need for efficient transportation, and they are helping improve new vehicle safety, fuel efficiency and emission reductions. Suppliers also provide quality jobs that support our communities. With a constant focus on the future and what will best meet public need, automotive and heavy-duty suppliers continue to keep the country moving, part by part.
  11. 11. WWW.MEMA.ORG AASA, HDMA, MEMA OFFICES MEMA WASHINGTON OFFICE OESA OFFICE 10 Laboratory Drive, PO Box 13966 1225 New York Avenue, NW, Suite 300 1301 W Long Lake Road, Suite 225 Research Triangle Park, NC 27709 Washington, DC 20005 Troy, Michigan 48098 “Moving America. Part by Part.” Based on research undertaken by the Center for Automotive Research on behalf of the Motor & Equipment Manufacturers Association (MEMA); Who Really Made Your Car?, Thomas Klier and James Rubenstein, Upjohn Institute; and information compiled by MEMA, April 2009.