Blow to the automotive sector, pillar of the US economy

With nearly 10 million Job positionshe automotive sector is a fundamental player in the US economy that is at risk of suffering the effects of strike started on Friday by employees of the three main manufacturers.

“The automotive ecosystem generates one trillion dollars annually for the US economy, or almost 5% of the gross domestic product”states the Alliance for Automotive Innovation on its website, where it indicates that, at the end of 2022, the sector directly employed more than 9.67 million people.

The Alliance, citing a study by S&P Global Mobility, specifies that in 2022, 13.5 million new vehicles will be sold in the country.

That year, the sector exported US$96.6 billion and totaled US$282 billion in imports, contributing US$126.2 billion to federal coffers.

The country has a vehicle fleet of 284 million registered vehicles, including 100.61 million cars, 103.26 million minivans, 59 million pickup trucks and 15.73 million vans.

Combustion/hybrid engines remain the majority with 280.87 million, ahead of 2.14 million electric vehicles (EV).

This branch benefits from the growth of the manufacturer Tesla, which produced 1.36 million electric vehicles worldwide in 2022 (+47%). Its turnover reached US$ 81.5 billion (+51%) and its net profit more than doubled, up to 12.6 billion.

According to Kelley Blue Book, a subsidiary of Cox Automotive, the average price of a new vehicle stood at US$48,334 in July 2023 (+2.7% since the beginning of the year). In the case of electric vehicles, it continued to fall until reaching US$53,469 in July (61,000 in January).

Investments for the electric transition reached US$109.1 billion between 2018 and 2023, according to the Automotive Research Center (CAR).

According to the US Bureau of Statistics, the average hourly wage in the manufacturing sector in August 2023 stood at US$27.99 for an average weekly work of 44.3 hours.

The “Big Three”

The AAPC association, which represents the three great historical manufacturers – General Motors, Ford and Stellantis, nicknamed the “Big Three”– states that they alone contribute 3% of the GDP. It presents the automobile industry as the largest manufacturing sector in the country.

These three groups with roots in Detroit, Michigan, operate 60% of the country’s assembly plants. They have announced more than US$34 billion in investments in the last six years.

Since this Friday, the three have been the subject of a historic strike, whose “The greatest risk in the event of an extension is a deterioration in the supply chain and the financial health of suppliers,” commented CFRA analyst Garrett Nelson.

General Motors employs, according to its website, 92,000 people in the United States. It has paid $10.9 billion in taxable wages.

It has 120 locations, just over 4,000 distributors and more than 5,700 suppliers on which it will spend US$39 billion in 2022.

GM delivered 2.27 million vehicles in the United States in 2022, from the Chevrolet, Buick, GMC and Cadillac brands.

In 2022, its turnover increased by 23% to US$157 billion and its net profit fell 1% to US$9.9 billion.

Ford, created 120 years ago, employs about 177,000 people, 86,000 of them in the United States, and is presented as the largest American exporter of cars.

It manufactures the Ford brands – particularly the F-150 pickup truck, the best-selling vehicle in the country for decades – and Lincoln. Almost 80% of its vehicles are assembled in the United States.

Its net profit reached US$17.9 billion in 2022.

Stellantis, the French-Italian-American group, makes 14 brands, including Ram Trucks, Jeep, Chrysler, Dodge, Peugeot, Alfa Romeo, Maserati, Opel, Peugeot and Fiat. It is established in more than 30 countries and sells its production in more than 130 markets.

The result of the merger between Fiat-Chrysler and the French PSA in 2021, it has 264,000 employees around the world.

In 2022 it recorded a second year of record profits, with a net profit of €16.8 billion.

Foreign manufacturers

According to Autos Drive America, which represents foreign manufacturers, they produced 4.4 million vehicles in the United States in 2022.

Their manufacturing volume has increased more than 85% over the past 25 years and they have invested more than $100 billion over six decades, according to a 2022 study by Ernst and Young.

Its share of production in the United States increased from 1% in 1979 to 45% in 2022.

The brands BMW, Kia, Honda, Lexus, Infinity, Mercedes, Mazda, Nissan, Toyota, Volvo, Volkswagen, Subaru, Hyundai, Acura have factories in the United States.

Its 65 models manufactured on American soil are exported to more than 130 countries around the world (695,000 vehicles exported in 2022).

In 2022, they directly employed 156,000 people.

Source: AFP