Factoid: US Auto Manufacturing

Mark Perry has a chart laden post about the US auto industry on his Carpe Diem blog that is worth checking out.

The chart I find most interesting is one that shows the Federal Reserves index of motor vehicles and parts productionin the US from 1972-2014 (below). Note that current production is about double what it was prior to 1993.

So what? Well, this just another factoid in my push-back against the notion that US manufacturing has vanished. That meme would have been true in the 1980s but hasn't been true since then. Note that, even at the height (or depth) of the Great Recession, the US produced about as many vehicle and parts as it did in the 1970s.

Of course, as is usually the case with manufacturing, higher output doe not mean higher employment. The chart below come from the Bureau of Labor Statistics and show employment in the US vehicles and parts industry.

 Employment in US Motor Vehicle and Parts Manufacturing Industry 1990-2014

Source: BLS

Sadly, BLS only has data from 1990 onward, but we can see enough in this chart, especially if we compare it to Perry's chart at top. Though production remained stable from 2000-2008 (top chart), the BLS graph shows that employment by roughly 300,000 in the same period. Of course, employment nose dived in the recession but has not comeback to pre-recession levels despite the fact that output is higher than it was before the recession.

From the society's point of view, this drop in employment is not a good thing (especially for Detroit). However, in terms of the auto industry, it is a sign of improved efficiency since manufacturers are making more vehicles and parts with about 500,000 less workers in 2014 compared to 2000. While hardly a rebirth, it is a significant improvement.

Of course, one needs to take care not to confuse the US auto industry with the Big Three (GM, Chrysler and Ford). As noted in Perry's post, 7 out of 10 of the best selling US auto mobiles are made by Toyota and Honda. Indeed, Cars.com, who published the 2014 American Made index  notes that there were only 13 cars that qualified as American made and 3 of them were being discontinued and so were not eligible for their top 10 list. That left every "American made" car on the top ten list (one wonders if there will be enough next year to have a top 10 list). As further evidence of the globalization of the US auto industry, Perry also notes that BMW is actually the largest exporter of vehicles from the US and that those exports have increased significantly since the end of the recession (see chart below).

From Mark Perry's Carpe Diem blog