New industry report shows Arkansas’ maturing auto parts sector is a steady, reliable manufacturing sector

In its annual report on the U.S. auto industry called “Cars Move America,” the Alliance of Automobile Manufacturers estimated that Arkansas contributed 62,000 jobs to the state’s labor pool in 2015 and supported billions of dollars in economy activity.

That 2015 snapshot of the state’s auto manufacturing sector nearly mirrors the previous industry report in 2013 when the industry trade group released its first comprehensive report on the impact of the auto manufacturing sector to the U.S. economy. Unlike previous years, however, the 2016 report did not include the total economic impact in dollars for the state of Arkansas. (Link here for a PDF of the report.)

Still, despite Arkansas remaining one of the few southern states without an auto manufacturing plant, the report shows the state’s maturing auto parts sector is now a reliable contributor to the state’s working class economy representing 4.8% of the state’s 1.35 million labor force.

The report was commissioned by the Alliance of Automobile Manufacturers (Auto Alliance), which represent 12 of the nation’s largest automakers. The group includes BMW Group, Fiat Chrysler, Ford Motor Co., General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota, Volkswagen Group of America and Volvo Cars North America.

The Auto Alliance report shows the U.S. auto manufacturing sector supported a total of 7.25 million American jobs, or about 3.8% of private-sector employment and generates $953 billion into the U.S. economy each year. Of the total jobs, more than 3.16 million workers were employed in the auto parts sector, 2.44 million in auto manufacturing plants and 1.65 million in auto dealer facilities across the U.S. In 23 states, auto manufacturing accounts for between 14% and 20% of state tax revenues, the report shows.

“From the largest companies in the world to the smallest family-owned business, the auto industry is the backbone of American manufacturing,” the Auto Alliance states. “Through our assembly plants, parts suppliers, auto dealers and vehicle service and support, autos deliver the products that power the American economy forward.”

Of note in this year’s report is a special section on how the auto-related economic activity is impacting export activity in auto and non-auto manufacturing states. In 2015 alone, exports of cars and parts amounting to over $99 billion were shipped from U.S. ports— almost double the $50.8 billion of auto products America exported just over a decade ago, the report shows.

ARKANSAS NUMBERS
In Arkansas, the Auto Alliance report shows that $79.5 million of Arkansas’s $612.8 million in port activity was generated mainly from the export of auto parts from the state. Bryan Day, executive director of the Little Rock Port Authority (LRPA), said auto parts export is a small, but consistent and reliable source of export income for the state’s largest river dock.

“Our auto business doesn’t handle a lot of tonnage, but what we do has been consistent over the last few years,” Day said. “It is a known quantity that comes through our port and is a steady source of business across our docks.”

In the past year, Day said the two auto-related commodities generated most of the tonnage at the Little Rock port. Exports of tired-grade wire rod coils and wet cake aluminum used in the auto manufacturing industry generated more than 75,000 tons of shipments in the past year, he said.

The LRPA was recently awarded nearly $6.2 million from the U.S. Department of Transportation (DOT) to help build a new dock in the Slackwater Harbor that will expand rail capability and storage that will open up the Arkansas River port to global markets. Construction on that project, which will cost about $10.3 million, is expected to begin in early 2017.

The Auto Alliance said its members hope to increase exports and imports of auto goods in port facilities in every region of the country. A decade ago, 68 countries around the globe imported substantial amounts of American auto products (at least $10 million worth). In 2015, 88 countries imported over $10 million worth of auto goods from the U.S.