Level Field Institute releases report on domestic content
The Level Field Institute - a group consisting of Big 3 retirees - has released a report detailing the impact of domestic and transplant automotive OEMs on the American auto parts industry, and it contains some interesting nuggets of information.
Of the $225B in auto parts purchased from the US last year, approximately 77% was bought by the Big 3. GM led the spending with $85B in purchases, compared to $20B by Toyota. Overall, the domestic content of vehicles from the Big 3 averaged 71%, while Japanese automakers came in at 48% (note that both figures include vehicles that were manufactured elsewhere and imported into the US). Honda has the highest domestic content of any company outside of the Big 3, with 59% of its parts sourced in North America.
As the Level Field Institute points out, if the Big 3 were to drop their domestic parts buying down to the level of import manufacturers, the net loss to the US auto parts industry would be about $83B and 232,000 jobs. On the other hand, if the import manufacturers bring their domestic component buying up to the same level as the Big 3, the gain would be about $47B and 131,000 jobs. In all likelihood, what we'll actually see in the coming years is a convergence of these trends, with domestic manufacturers buying fewer components state-side, and foreign manufacturers increasing their domestic content.
[Source: Level Field Institute]
Warning - the Read link below points to a PDF.
Reader Comments (Page 1 of 1)
SLK 4:19PM (9/01/2006)
$83B / 232K = $357K per employee, I know this industry has a fair amount of automation but that seems like an out-of -skew number.
Reply
elprogramer 1:41AM (3/21/2008)
You have to take in account profit and overhead for the suppliers, not just wages.
Lithous 5:55PM (9/01/2006)
"In all likelihood, what we'll actually see in the coming years is a convergence of these trends, with domestic manufacturers buying fewer components state-side, and foreign manufacturers increasing their domestic content."
Well yeah. Tesla wants to compete with Toyota some day using all thier Taiwanese motors, Chinese (maybe they can afford Japanese at $80K - $100K a shot) laptop batteries and a bunch of British other parts. If Tesla is the future then you're right.
Reply
Corey 6:33PM (9/01/2006)
It's hard not to question the numbers given that "What You Drive, Drives America" is plastered on the main page, and the header.
http://www.levelfieldinstitute.org/
However, I'm not saying that there isn't a bit of truth in it. I wonder if the gap is as wide as they say it is.
Reply