The Texas Automotive Manufacturing Industry

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The Texas Automotive Manufacturing Industry

Transcript Of The Texas Automotive Manufacturing Industry

The Texas Automotive Manufacturing
Industry
2014

Contents

Overview………………………………………………………………….

1

Passenger Vehicles………..……...………………………………..

10

Heavy Duty Trucks……………………………………………………

16

Trailers……………………………………………………………….……

19

Automotive Parts…………..………………………..………………

20

The report’s cover photos above are courtesy of the companies. From top left: Toshiba HEV motor, Peterbilt Model 579 truck, Cadillac Escalade, Toyota Tundra, Chevrolet Suburban, Load Trailer gooseneck trailer, Peterbilt Model 567 truck, Caterpillar C7 truck engine, Toyota Tacoma

Texas Auto Manufacturing Headlines
Toyota selects Texas for its new U.S. headquarters
See Page 12

General Motors Arlington assembly plant celebrates 60 years

Toyota announces two new Texas auto suppliers, ASI and Forma Automotive

See Page 11

See Page 13

Jobs in Texas auto manufacturing sector surge over 29% since 2010

Caterpillar to close South Carolina plant, move C7 engine assembly line to Texas

Texas automotive exports jump 49% over past five years

See Page 3
Peterbilt celebrates 75 years in Denton, Texas
See Page 17

See Page 22

See Page 7

Texas ranks No. 7 nationally for automotive manufacturing employment
See Page 3

Automotive Manufacturing in Texas
These sectors include the assembly of complete cars and trucks, as well as the manufacturing of motor vehicle frames, chassis, cabs, utility trailers, military vehicles, and automotive gasoline engines. The U.S. government’s North American Industry Classification System (NAICS) classifies the auto industry under the following categories:

Automotive Manufacturing Sectors

2014 Chevrolet Suburban

 Motor Vehicle Manufacturing/Assembly

T exas is home to a well-established automotive manufacturing sector that, unlike in many other states, has continued to grow in the 21st century. A right-to-work state,

 Motor Vehicle Body & Trailer Manufacturing  Motor Vehicle Parts Manufacturing

Texas is nationally ranked in the top ten for automotive manufactur-

Major Automotive Manufacturers in Texas

ing employment and establish-

ments, the size of its vehicle

retail market, and the number

of vehicle registrations. Texas is

also part of the growing NAFTA

auto corridor, where billions of

dollars of assembled vehicles and

auto parts are shipped between

Mexico and the Lone Star State.

The state is home to two major passenger vehicle assembly plants, operated by global leaders General Motors (GM) and Toyota. GM’s Arlington plant has operated for 60 years and currently produces SUVs, while Toyota began production of fullsize pickups at its San Antonio plant in 2006.

The automotive manufacturing industry encompasses makers of cars and trucks, motor vehicle bodies, and auto parts.

1

Auto Manufacturing Workforce
Although it is outside the traditional automotive belt of the Midwest and Southeast, Texas is currently one of the top ten states in the U.S. by number of automotive workers and number of auto manufacturing establishments. More than 466 automotive manufacturing firms directly employ over 35,800 workers in Texas. Workers at these companies earn an average of around $58,700 annually (see table below).
Texas ranks No. 7 nationally for automotive manufacturing
employment
- U.S. Bureau of Labor Statistics (2012)
Employment has increased steadily over the past four years, growing over 23.6% from 2010 to 2014 (see chart on page 3).
The table below provides a snapshot of employment in the Texas automotive manufacturing industry in the first quarter of 2014. The motor vehicle parts manufacturing sector accounts for 45% of the state’s automotive manufacturing employment (see chart at right).

OOVVEERRVVIIEEWW Top Automotive Manufacturing
Employers In Texas (2013)
1 General Motors (Arlington): 4,500+ 2 Toyota (San Antonio): 2,900 3 Peterbilt Motors: 2,200 4 Toshiba International Corp. 2,000 5 Caterpillar (Engine Assembly): 1,160
Texas Automotive Manufacturing Employment, by Sector
Chart Source: Texas Workforce Commission

Automotive Manufacturing Employment in Texas
2014 First Quarter

Sector (Industry Code)

Employees

Firms

Motor Vehicle Manufacturing (3361)

12,096

29

Average Annual Wage
$75,752

Motor Vehicle Body & Trailer Manufacturing (3362)

7,424

168

$41,392

Motor Vehicle Parts Manufacturing (3363)

16,288

269

$53,300

TOTALS

35,808

466

$58,753

Source: Texas Workforce Commission

2

OVERVIEW
Five-Year Trends: Texas Automotive Manufacturing Employment, 2008-2012

Employment

18,000 16,000 14,000 12,000 10,000
8,000 6,000 4,000 2,000

2010

2011

2012

2013

2014

Motor Vehicle Parts Mfg. Motor Vehicle Mfg. Motor Vehicle Body & Trailer Mfg.
Source: Texas Workforce Commission Data from first quarter each year

In 2012, Texas ranked No. 5 nationally for automotive manufacturing establishments and No. 7 nationally for automotive manufacturing employment (see table to right).

Between 2010 and 2014, overall employment in the

Texas automotive manufacturing industry increased

steadily, as the national

The motor vehicle manufacturing sector has increased employment over 29.4 % since 2010

and global recession receded and the national automotive manufacturing industry rebounded (see chart

above). Among the

three subsectors of the Texas automotive

manufacturing industry, the motor vehicle

manufacturing sector has led the way with

employment gains of more than 29.4% since 2010.

Motor vehicle body & trailer manufacturing

employment during the same period saw gains of

28.9%, while motor vehicle parts manufacturing

employment increased by 16.7%.

Texas Ranks No. 7 in the U.S. in Total Auto Manufacturing Employment
Michigan 150,169 Indiana 96,732
Ohio 88,013
Tennessee 48,465 Kentucky 45,301 Illinois 33,843 Texas 33,776
Source: U.S. Bureau of Labor Statistics

3

Research & Development
From electronics to fuel economy to tire performance, a wide range of automotive technologies are developed and tested by Texas companies.
Automotive Semiconductors
Dallas-based electronics giant Texas Instruments designs semiconductors for a range of automotive applications, including body electronics, power trains, hybrid chargers,
brakes, and infotainment systems.
Freescale Semiconductor, based in Austin, has designed and manufactured automotive semiconductors since the 1950s. As one of the world’s leading suppliers of automotive
processors, microcontrollers, and sensors, Freescale’s technology is utilized in many new vehicles, including GM’s Texas-built hybrid SUVs. Freescale has been a GM supplier for nearly 30 years.
Spansion, based in Califor nia with a major manufacturing site in Austin employing about 860, expanded its share of the automotive market with the 2014 debut of its Traveo line of microcontrollers for electric and hybrid
vehicles. Spansion’s ARM-based dual-core chips are designed to be used for electric vehicles, battery management, air conditioning and heating systems, and automotive displays.
Multiple smaller semiconductor firms in Texas also supply the auto industry. These firms include SMSC, which develops and supplies microelectron-
ics for automotive multimedia systems at its Austin, design center, and Silicon Labs, an Austin-based industry leader in the development of mixed-signal integrated circuits optimized for automotive applications.

OVERVIEW
Automotive Test Facilities
Near Fort Stockton, Texas, midway between El Paso and San Antonio, lies Bridgestone Americas’ Texas Proving Ground (TPG). Established in 1955, TPG is more than 6,000 acres of flat land that features a variety of test tracks and driving environments, where tires and vehicles can be tested in reallife conditions.
German manufacturer Continental Automotive Systems oper ates a state-of-the-art test track facility in Uvalde, Texas. The 5,000-acre Uvalde Proving Grounds’ rural location, combined with high security, make it ideal for testing top secret components and vehicles for ride, handling, durability, and more. The facility was originally built by General Tire in 1959.
Also located in West Texas, the Goodyear Tire Proving Grounds near San Angelo, provides the leading tire maker with product test facilities. Built in 1957, the 7,000-acre site is one of only three proving grounds Goodyear operates in the U.S.
In Laredo, Texas, a 2,000-acre facility owned by German firm MBTech Group offers a variety of special tracks and surfaces for vehicle and tire testing. The company is a joint subsidiary of AKKA Technologies, an industrial research and development firm based in France, and Daimler, the German parent company of Mercedes-Benz.
The Texas A&M Transportation Institute owns and operates the Proving Grounds Research Facility, a 2,000-acre complex where researchers test vehicles for all kinds of clients and a wide spectrum of vehicles, ranging from subcompacts to tractor-trailer rigs. The facility performs crash tests and also tests roadside safety devices.

4

OVERVIEW

San Antonio Institute Puts Automotive Technologies to the Test

T he Southwest Research Institute (SwRI), headquartered in San Antonio, Texas, is one of the nation’s oldest and largest independent, nonprofit, research and development organizations. Employing over 2,800, the institute occupies over two million sq. ft. of laboratories, test facilities, and offices. Its 2013 revenues exceeded $592 million.

SwRI’s world-class Office of Automotive Engineering coordinates operations with automotive clients. Among these operations is the Engine, Emissions and Vehicle Research Division, which designs and tests a wide range of automotive technologies, including powertrains, fuel cells, and diesel systems. The Fuels and Lubricants Research Division helps clients get automotive component and fluid products to market and improve them during their lifespan. Additionally, SwRI’s Automotive Fleet Testing program provides comparative data for vehicle performance under actual operating conditions.

Automotive fuel performance evaluation
SwRI currently operates seven automotive industry consortia to support its clients, as well as the U.S. Army TARDEC (Tank Automotive Research Development & Engineering Center) Fuels and Lubricants Research Facility, a government-owned facility in operation since 1957. The institute also maintains automotive operations abroad in India and in China through the Tianjin-based SwARC Automotive Research Laboratory, a joint venture with state-owned China Automotive Technology and Research Center (CATARC).

R&D Credit Regulation
In June 2013, Gov. Rick Perry signed HB 800 into law, reinstating the R&D tax credit for Texas companies. Both the sales tax exemption and research credit are extended through 2026 and are expected to be a boost to Texas manufacturing and high-technology industries, including automotive. The law went into effect in January 2014.
HB 800 reinstates franchise tax credits for companies conducting qualified research activities (QRAs) within the state. The new law provides Texas companies the option of selecting either a sales tax exemption on property purchased by persons engaged in QRAs or the franchise tax credit, but not both.

Engine oil oxidation testing at SwRI

5

OVERVIEW

The Texas-Mexico Automotive Corridor

Sharing the longest border with Mexico of any U.S. Mexican, or Canadian parts to be duty-free, has made

state, Texas is uniquely positioned for international Texas a highly competitive location for automotive

trade with this significant emerging market in the manufacturers. The shaded region on the map below

global

automotive represents the NAFTA superhighway corridor.

Texas serves as a primary link between Mexico’s auto plants and the rest of the U.S. auto industry

industry. Billions of dollars in automotive goods are shipped from Texas annually.
Texas has become an

NAFTA’s impact is evident in northeastern Mexico’s growing automotive cluster, located near the border of Texas. Manufacturers with facilities in this region of Mexico include GM, Toyota, Peterbilt, Freightliner, and Navistar International. Some of these firms also

important part of the have facilities in Texas, which are detailed on the map

realigned North American “auto alley,” now running on page 1 of this report.

north from Mexico through a number of

southern U.S. states, to the Midwest rust belt. The traditional U.S. auto corridor

Auto Manufacturing in the Texas-Mexico Corridor

radiating from Detroit has rapidly shifted

toward the U.S. South since the 1980s.

Almost all the North American

automotive plants built in the last two

decades were located in a southern U.S.

state or Mexico. Many foreign-owned

automotive firms, such as Toyota,

Nissan, Subaru, Volkswagen, MercedesBenz, BMW, and Kia, have located their

TEXAS

operations in southern right-to-work

states, away from the traditional center of

U.S. automotive manufacturing.

Spurred by the 1992 North American Free Trade Agreement (NAFTA), Texas serves as a primary link between Mexico’s automotive plants and the rest of the U.S. automotive industry. The “NAFTA superhighway,” which runs through Texas as Interstate 35, serves as a main artery for the southern U.S. and northern Mexico’s auto manufacturing industry. The region’s large, skilled, and cost-effective labor pool, coupled with the NAFTA provision that qualifies any product with at least 62.5% American,

MEXICO
Manufacturing Plants Tier 1 OEM Suppliers

Map courtesy of Bexar County Economic Development

6

OVERVIEW
Foreign Trade & Logistics

In 2013, Texas ranked as the No. 3 state for transportation equipment exports, with a value of over $24.4 billion, according to the U.S. Census Bureau. NAFTA partners Mexico and Canada were the top two destinations for Texas transportation exports.

Over the past five years, Texas automotive exports

have increased almost 49% from around $9.2 billion

in 2009 to over $18.1 billion in 2013. Two of the

Over the past 5 years, Texas automotive exports increased 49%

three major motor vehicle manufacturing segments grew during this period (see chart

below), despite the 6%

decrease in the motor vehicle manufacturing segment

between 2012 and 2013. Motor vehicle parts is the

largest of the three segments and experienced the

strongest growth, increasing 50.6% from over $5.8

billion in 2009 to over $11.8 billion in 2013.

In 2013, Texas ranked No. 3 nationally for transportation equipment imports, with a value of over $27.1 billion, according to the U.S. Census Bureau. Mexico

Hisun Motors selects McKinney for New N.A. Headquarters
In April 2014, China-based Hisun Motors Corp. USA announced plans to open its North America (N.A.) headquarters in McKinney, Texas. The company expects the move to create about 80 jobs, in addition to the existing jobs in a service center that opened in Carrollton, Texas in 2006.

Hisun Motors is the sixth manufacturer of utilityterrain vehicles (UTVs) and all-terrain vehicles (ATVs) in the U.S. and Canada, distributing them via outlets like Cabelas and Wal-Mart using the brand name HISUN.

largest

and Germany were the top two countries importing transportation equipment into Texas.

Five Year Trends: Texas Automotive Exports, 2009-2013

Exports in Millions

Source: U.S. Census Bureau, Foreign Trade Division
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TexasVehiclesManufacturing EmploymentManufacturing IndustryMexico