The Texas Automotive Manufacturing Industry ?· Texas automotive manufacturing industry increased steadily,…

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  • The Texas Automotive Manufacturing

    Industry

    2014

  • Overview. 1

    Passenger Vehicles....... 10

    Heavy Duty Trucks 16

    Trailers. 19

    Automotive Parts.... 20

    Contents

    The reports 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

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

    See Page 3

    Texas automotive exports jump 49% over past five years

    See Page 7

    See Page 13

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

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

    See Page 22

    Texas ranks No. 7 nationally for automotive manufacturing employment

    See Page 3

    Peterbilt celebrates 75 years in Denton, Texas

    See Page 17

    Toyota selects Texas for its new U.S. headquarters

    See Page 12

    See Page 11

    General Motors Arlington assembly plant celebrates 60 years

  • 1

    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.

    governments North American Industry Classification

    System (NAICS) classifies the auto industry under the

    following categories:

    Automotive Manufacturing Sectors

    Motor Vehicle Manufacturing/Assembly

    Motor Vehicle Body & Trailer Manufacturing

    Motor Vehicle Parts Manufacturing

    Automotive Manufacturing in Texas

    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,

    Texas is nationally ranked in the

    top ten for automotive manufactur-

    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. GMs

    Arlington plant has operated for 60

    years and currently produces SUVs,

    while Toyota began production of full-

    size pickups at its San Antonio plant in

    2006.

    The automotive manufacturing industry

    encompasses makers of cars and trucks,

    motor vehicle bodies, and auto parts.

    2014 Chevrolet Suburban

    Major Automotive Manufacturers in Texas

  • OVERVIEW

    Automotive Manufacturing Employment in Texas 2014 First Quarter

    Sector (Industry Code) Employees Firms Average

    Annual Wage

    Motor Vehicle Manufacturing (3361) 12,096 29 $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

    Texas ranks No. 7 nationally for automotive manufacturing

    employment

    - U.S. Bureau of Labor Statistics (2012)

    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

    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 automo-

    tive workers and number of auto manufacturing

    establishments. More than 466 automotive manufac-

    turing firms directly employ over 35,800 workers in

    Texas. Workers at these companies earn an average of

    around $58,700 annually (see table below).

    Auto Manufacturing Workforce

    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 manu-

    facturing sector accounts for 45% of the states

    automotive manufacturing employment (see chart at

    right).

    Chart Source: Texas Workforce Commission

    Texas Automotive Manufacturing Employment, by Sector

    2

    OVERVIEW

  • 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

    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%.

    OVERVIEW

    Source: Texas Workforce Commission Data from first quarter each year

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

    Motor Vehicle Parts Mfg.

    Motor Vehicle Mfg.

    Motor Vehicle Body & Trailer Mfg.

    Emp

    loym

    ent

    16,000

    14,000

    12,000

    10,000

    8,000

    6,000

    4,000

    2,000

    18,000

    2010 2011 2012 2013 2014

    3

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

    Source: U.S. Bureau of Labor Statistics

    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

  • From electronics to fuel economy to tire perfor-

    mance, 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 worlds leading suppliers of automotive

    processors, microcontrollers, and sensors, Free-

    scales technology is utilized in many new vehicles,

    including GMs Texas-built hybrid SUVs. Freescale

    has been a GM supplier for nearly 30 years.

    Spansion, based in California with a major manu-

    facturing 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. Spansions 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.

    Research & Development Automotive Test Facilities Near Fort Stockton, Texas, midway between El Paso

    and San Antonio, lies Bridgestone Americas Texas

    Proving Ground (TPG). Estab-

    lished in 1955, TPG is more than

    6,000 acres of flat land that

    features a variety of test tracks and driving environ-

    ments, where tires and vehicles can be tested in real-

    life conditions.

    German manufacturer Continental Automotive

    Systems operates a state-of-the-art test track

    facility in Uvalde, Texas. The

    5,000-acre Uvalde Proving

    Grounds rural location, com-

    bined with high security, make it ideal for testing

    top secret components and vehicles for ride, han-

    dling, durability, and more. The facility was origi-

    nally 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

  • T he Southwest Research Institute (SwRI), headquartered in San Antonio, Texas, is one of the nations 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.

    SwRIs 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, SwRIs Automotive Fleet Testing program provides comparative data for vehicle performance under actual operating conditions.

    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).

    San Antonio Institute Puts Automotive Technologies to the Test

    Automotive fuel performance evaluation

    5

    Engine oil oxidation testing at SwRI

    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.

    OVERVIEW

    http://www.kbkg.com/research-tax-credits

  • Sharing the longest border with Mexico of any U.S.

    state, Texas is uniquely positioned for international

    trade with this significant emerging market in the

    global automotive

    industry. Billions of

    dollars in automotive

    goods are shipped from

    Texas annually.

    Texas has become an

    important part of the

    realigned North American auto alley, now running

    north from Mexico through a number of

    southern U.S. states, to the Midwest rust

    belt. The traditional U.S. auto 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, Mercedes-

    Benz, BMW, and Kia, have located their

    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

    Mexicos 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 Mexicos auto manufacturing

    industry. The regions large, skilled, and

    cost-effective labor pool, coupled with

    the NAFTA provision that qualifies any

    product with at least 62.5% American,

    Mexican, or Canadian parts to be duty-free, has made

    Texas a highly competitive location for automotive

    manufacturers. The shaded region on the map below

    represents the NAFTA superhighway corridor.

    NAFTAs impact is evident in northeastern Mexicos

    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

    have facilities in Texas, which are detailed on the map

    on page 1 of this report.

    M E X I C O

    T E X A S

    Auto Manufacturing in the Texas-Mexico Corridor

    Tier 1 OEM Suppliers

    Manufacturing Plants

    Map courtesy of Bexar County Economic Development

    The Texas-Mexico Automotive Corridor

    6

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

    OVERVIEW

  • In 2013, Texas ranked as the No. 3 state for transpor-

    tation 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

    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 transporta-

    tion equipment imports, with a value of over $27.1

    billion, according to the U.S. Census Bureau. Mexico and Germany were the top two countries importing

    transportation equipment into Texas.

    Foreign Trade & Logistics

    7

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

    Five Year Trends: Texas Automotive Exports, 2009-2013

    Source: U.S. Census Bureau, Foreign Trade Division

    Exp

    ort

    s in

    Mill

    ion

    s

    Hisun Motors selects McKinney for New N.A. Headquarters

    In April 2014, China-based Hisun Motors

    Corp....

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