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Motor Vehicle and Equipment Manufacturing

Nature of the Industry  |  Working Conditions  |  Employment  |  Occupations in the Industry
Training and Advancement  |  Job Outlook  |  Earnings

Significant Points

• Nearly one-third of all the industry’s jobs are located in Michigan.
• Larger manufacturers are turning toward independent parts and component makers.
• Average earnings are very high compared with those in other industries.
• Employment is highly sensitive to cyclical swings in the economy, but generally is expected to grow.

Nature of the Industry

The motor vehicle is an intricate series of systems, subsystems, and components assembled into a final product. Each manufactured part or component is integrated into the vehicle—none is developed to exist separately. Vehicles are constantly changing as new technology or reengineered components are incorporated, and as new and updated models are designed to keep abreast of the constantly changing tastes of buyers. Like their products, motor vehicle and equipment manufacturers are complex organizations that constantly evolve to maximize their efficiency and maintain a continuing stream of commercially viable products in a highly competitive market. 
Motor vehicles play a central role in our society. Most U.S. residents rely on them every day to get to work or school, to go shopping, or to visit family and friends. Businesses depend on motor vehicles to transport people and goods. The United States is the world’s largest marketplace for motor vehicles due to the size and affluence of its population. According to the U.S. Department of Transportation, more than 210 million motor vehicles—over 131 million passenger cars and 79 million trucks—were registered in the United States in 1998. The number of light trucks has shown especially steady growth since the mid- to late 1980s. 

The motor vehicle and equipment manufacturing industry in the United States has become increasingly integrated into the international economy. In fact, “domestic” vehicles often are produced using the components, manufacturing plants, and distribution methods of other nations around the world, as U.S. and foreign manufacturers of motor vehicles benefit from competitive cooperation in the design, production, and distribution of vehicles and parts. Collaboration in manufacturing practices has dramatically increased productivity and improved efficiency. These cooperative practices have also caused manufacturers from the United States, Europe, and the Pacific Rim to locate production plants in the countries in which they plan to sell their vehicles, to reduce distribution time and costs. Foreign motor vehicle and parts makers with production sites in the United States are known as “transplants,” and account for a growing share of U.S. production and employment. 

Globalization of the industry has boosted competition among U.S. motor vehicle manufacturers, prompting innovations in product design and in the manufacturing process. One result of these product innovations is a proliferation of rapidly designed and produced new models aimed at niches in the market. Firms also must be fast and flexible in implementing new production techniques. Smaller production runs and mass customization result from attempts to reduce waste in the production cycle, develop more adaptive production facilities, and allow customer demand to drive changes in design and marketing. Customer-driven markets force manufacturers to replace traditional assembly lines with modern systems using computers, robots, and interchangeable tools. Customized plants put resources in the right place at the right time, allowing manufacturers to change production inputs quickly and accurately. 

Competition has led manufacturers to adopt innovative approaches to research and development, often in response to evolving consumer and regulatory demands. For example, demand for vehicles that can run on alternative fuels derived from batteries or solar power will put pressure on manufacturers to develop a great deal of new technology, a challenge that likely will necessitate cooperation among both domestic and foreign manufacturers. 

The vehicles we drive are only a small part of the story in motor vehicle and equipment manufacturing. In 2000, about 6,500 establishments manufactured motor vehicles and equipment; these ranged from small parts plants with only a few workers to huge assembly plants that employ thousands. Table 1 shows that nearly 7 out of 10 establishments in the industry manufactured motor vehicle parts and accessories—including axles, brakes, camshafts, defrosters, engines, frames, manifolds, radiators, steering mechanisms, transmissions, and windshield wiper systems. Other establishments specialized in assembling finished motor vehicles—passenger cars, sport utility vehicles, pickup trucks and vans, heavy-duty trucks, buses, and special purpose motor vehicles ranging from limousines to garbage trucks. Still others manufacture truck trailers, motor homes, and special bodies placed on separately purchased truck or bus chassis. 

Motor vehicle and equipment manufacturers have a major influence on other industries in the economy. They are major consumers of steel, rubber, plastics, glass, and other basic materials, thus creating jobs in industries that produce those materials. The production of motor vehicles also spurs employment growth in other industries, including motor vehicle dealerships, automotive repair shops, gasoline service stations, highway construction companies, and public transit companies. 

Working Conditions

In 2000, 38 percent of workers in the motor vehicle and equipment manufacturing industry worked, on average, more than 40 hours per week. Overtime is especially common during periods of peak demand. Most employees, however, typically work an 8-hour shift: either from 7:00 a.m. to 3:30 p.m. or from 4:00 p.m. to 12:30 a.m., with two breaks per shift and a half-hour for meals. A third shift often is reserved for maintenance and cleanup. 
Although working conditions have improved in recent years, some production workers are still subject to uncomfortable conditions. Heat, fumes, noise, and repetition are not uncommon in this industry. In addition, many workers come into contact with oil and grease and may have to lift and fit heavy objects. Employees also may operate powerful, high-speed machines that can be dangerous. Accidents and injuries usually are avoided when protective equipment and clothing are worn and safety practices are observed. 

Newer plants are more automated and have safer, more comfortable conditions. For example, these plants may have ergonomically designed work areas and job tasks that accommodate the worker’s physical size and eliminate awkward reaching and bending and unnecessary heavy lifting. Workers may function as part of a team, doing more than one job and thus reducing the repetitiveness of assembly line work. 

Workers in the motor vehicle and equipment manufacturing industry experience higher rates of injury and illness than do workers in most other industries. In 1999, cases of work-related injury and illness averaged 16.8 per 100 full-time workers in motor vehicle and equipment manufacturing, compared with 9.2 in all manufacturing industries and 6.3 in the entire private sector. 

As in other industries, professional and managerial workers normally have clean, comfortable offices, and are not subject to the hazards of assembly line work. Improved ergonomics help clerical support workers avoid repetitive strain injuries, but employees using computer terminals for long periods may develop eye strain and fatigue. 

Employment

Motor vehicle and equipment manufacturing was among the largest of the manufacturing industries in 2000, providing 1.0 million jobs. The majority of jobs, 54 percent, were in firms that make motor vehicle parts and accessories. About 35 percent of workers in the industry were employed in firms assembling motor vehicles and car bodies, while 11 percent worked in firms producing truck and bus bodies, truck trailers, and motor homes. 
Although motor vehicle and equipment manufacturing jobs are scattered throughout the Nation, certain States account for the greatest numbers of jobs. Michigan, for example, accounts for nearly one-third of all jobs. Combined, Michigan, Ohio, and Indiana include about half of all the jobs in this industry. Other States that account for significant numbers of jobs are California, New York, Illinois, Missouri, North Carolina, Tennessee, and Kentucky. 

Employment is concentrated in a relatively small number of very large establishments. More than 51 percent of motor vehicle and equipment manufacturing jobs are in firms with over 1,000 workers (see chart). Motor vehicle and car body manufacturing employment in particular is concentrated in large firms, whereas many motor vehicle parts and accessories jobs are found in small and medium-sized firms. 

Workers in motor vehicle and equipment manufacturing tend to be somewhat older than those in other industries. In 2000, the median age was 41.0 years, compared with 39.6 years for all workers. 

Occupations in the Industry

Prior to assembling components in the manufacturing plant, extensive design, engineering, testing, and production planning goes into the manufacture of motor vehicles. These tasks often require years and millions of dollars. 
Using artistic talent, computers, and information on product use, marketing, materials, and production methods, designers create designs they hope will make the vehicle competitive in the marketplace. Designers use sketches and computer-aided design techniques to create computer models of proposed vehicles. These computer models eliminate the need for physical body mockups in the design process because they give designers complete information on how each piece of the vehicle will work with others. Workers may repeatedly modify and redesign models until the models meet engineering, production, and marketing specifications. Designers working in parts and accessory production increasingly collaborate with manufacturers in the initial design stages to integrate motor vehicle parts and accessories into the design specifications for each vehicle. 

Engineers—the largest professional occupation in the industry—play an integral role in all stages of motor vehicle manufacturing. They oversee the building and testing of the engine, transmission, brakes, suspension, and other mechanical and electrical components. Using computers and assorted models, instruments, and tools, engineers simulate various parts of the vehicle to determine whether each part meets cost, safety, performance, and quality specifications. Mechanical engineers design improvements for engines, transmissions, and other working parts. Electrical and electronics engineers design the vehicle’s electrical system, including the ignition system and accessories, and industrial robot control systems used to assemble the vehicle. Industrial engineers concentrate on plant layout, including the arrangement of assembly line stations, material-moving equipment, work standards, and other production matters. 

Under the direction of engineers, engineering technicians prepare specifications for materials, devise and run tests to ensure product quality, and study ways to improve manufacturing efficiency. For example, testing may reveal how metal parts perform under conditions of heat, cold, and stress, and whether emissions control equipment meets environmental standards. Finally, prototype vehicles incorporating all the components are built and tested on test tracks, on road simulators, and in test chambers that can duplicate almost every driving condition, including crashes. 

Computer programmers write detailed instructions for computers, and computer systems analysts work with computer systems to improve manufacturing efficiency. When the many details are worked out, the machinery and tools required for assembly line production of the vehicle are set in place. 

Management workers establish guidelines for the design of motor vehicles to provide direction for the teams of experts in engineering, design, marketing, sales, finance, and production. From the earliest stages of planning and design, these specialists help to assess whether the vehicle will satisfy consumer demand, meet safety and environmental regulations, and prove economically practical to make. These executives also serve as public representatives for the company—they are the face of the company. 

Industrial production managers oversee first-line supervisors and managers of production and operating workers. These supervisors oversee inspectors, precision workers, machine setters and operators, assemblers, fabricators, and plant and system operators. They coordinate a variety of manufacturing processes and production activities, including scheduling, staffing, equipment, quality control, and inventory control. For example, metal parts are welded, plastic and glass parts are molded and cut, seat cushions are sewn, and many parts are painted. Many manufacturing processes are highly automated; robots, computers, and programmable devices are an integral part of motor vehicle manufacturing. Throughout the manufacturing process, “statistical process control” (teamwork and quality control) is emphasized. From initial planning and design to final assembly, numerous tests and inspections ensure that vehicles meet quality and safety standards. Modern manufacturing facilities integrate interchangeable tools on the assembly line so that they can quickly be changed to meet the needs of various models and specifications. 

Production workers account for more than 3 out of 5 motor vehicle and equipment manufacturing jobs (table 2). Assemblers and fabricators and metal workers and plastic workers put together various parts to form subassemblies, and then put the subassemblies together to build a complete motor vehicle. Some may perform other routine tasks such as mounting and inflating tires; adjusting brakes; and adding gas, oil, brake fluid, and coolant. Although robots perform most of the welding, welding, soldering, and brazing workers still are needed for some welding and for maintenance and repair duties. Machinists produce precision metal parts that are made in numbers too small to produce with automated machinery. Tool and die makers produce tools, dies, and special guiding and holding devices used in machines. Computer-controlled machine tool operators use computer-controlled machines or robots that can be programmed to manufacture parts of different dimensions automatically. 

Grinding and polishing workers use handtools or hand-held power tools to sand and polish metal surfaces, and painting workers paint surfaces of motor vehicles. Sewing machine operators sew together pieces of material to form seat covers and other parts. 

Throughout the manufacturing process, inspectors, testers, sorters, samplers, and weighers ensure that motor vehicles and parts meet quality standards. They inspect raw materials, check parts for defects, check the uniformity of subassemblies, and test drive vehicles. Helpers supply or hold materials or tools, and clean work areas and equipment. 

Keeping the plant running smoothly requires motor vehicle operators and material-moving workers. Industrial truck and tractor operators carry materials and equipment around and between factories, warehouses, and outdoor storage areas. Truckdrivers carry raw materials to plants, equipment and materials between plants, and finished motor vehicles to dealerships for sale to consumers. Laborers and hand freight, stock, and material movers manually move materials to and from storage areas, loading docks, delivery vehicles, and containers. Machine feeders and offbearers feed materials into, or remove materials from, machines or equipment on the assembly line, and hand packers and packagers manually package or wrap materials. 

Workers in construction, installation, maintenance, and repair occupations account for 1 out of 12 jobs in the motor vehicle and equipment manufacturing industry. These skilled workers set up, maintain, and repair equipment. Electricians service complex electrical equipment. Pipelayers, plumbers, pipefitters, and steamfitters install and repair piping, valves, pumps, and compressors. Industrial machinery mechanics and machinery maintenance workers maintain machinery and equipment to prevent costly breakdowns and, when necessary, perform repairs. Millwrights install and move machinery and heavy equipment according to the factory’s layout plans. Vehicle and mobile equipment mechanics, installers, and repairers repair bodies, engines, and other parts of motor vehicles, industrial trucks, and other mobile heavy equipment. 

Training & Advancement

Faced with technological advances and the continued need to cut costs, manufacturers increasingly emphasize continuing education and cross-train many workers—that is, they train workers to do more than one job. This has led to a change in the profile of the industry’s workers. Standards for new hires are much higher now than in the past. Employers increasingly require at least a high school diploma as the number of unskilled jobs declines. Manual dexterity will continue to be necessary for many production jobs, but employers also look for employees with good communication and math skills, as well as an aptitude for computers, problem-solving and critical thinking. Because many plants now emphasize the team approach, employees interact more with coworkers and supervisors to determine the best way to get the job done. They are expected to work with much less supervision than in the past and to be responsible for ensuring that their work conforms to guidelines. 
Opportunities for training and advancement vary considerably by occupation, plant size, and sector. Training programs in larger auto and light truck assembly plants usually are more extensive than those in smaller parts and accessories, truck trailer, and motor home factories. Production workers receive most of their training on the job or through more formal apprenticeship programs. Training normally takes from a few days to several months and may combine classroom with on-the-job training under the guidance of more experienced workers. Attaining the highest level of skill in some production jobs requires several years, however. Training often includes courses in health and safety, teamwork, and quality control. With advanced training and experience, production workers can advance to inspector or more skilled production, craft, operator, or repair jobs. 

Skilled production workers—such as tool and die makers, millwrights, machinists, pipefitters, and electricians—normally are hired on the basis of previous experience and, in some cases, a competitive examination. Alternatively, the company may train inexperienced workers in apprenticeship programs that last up to 5 years, and combine on-the-job training with classroom instruction. Typical courses include mechanical drawing, tool designing and programming, blueprint reading, shop mathematics, hydraulics, and electronics. Training also includes courses on health and safety, teamwork, quality control, computers, and diagnostic equipment. With training and experience, workers who excel can advance to become supervisors or managers. 

Motor vehicle manufacturers provide formal training opportunities to all workers, regardless of educational background. Manufacturers offer some classes themselves and pay tuition for workers who enroll in colleges, trade schools, or technical institutes. Workers sometimes can get college credit for training received on the job. Subjects of company training courses range from communication skills to computer science. Formal educational opportunities at postsecondary institutions range from courses in English, basic mathematics, electronics, and computer programming languages to work-study programs leading to associate, bachelor's, and graduate degrees in engineering and technician specialties, management, and other fields. 

Job Outlook

Employment in the motor vehicle and equipment manufacturing industry is expected to increase 9 percent over the 2000-10 period. In addition to job openings due to growth, the need to replace workers who transfer to jobs in other industries or retire will also generate job openings. A substantial number of job openings is expected from this source because more than one-third of the motor vehicle manufacturing workforce is over 44 years of age and positioned to retire in the near future. 
Not all the workers who retire or transfer to other occupations will be replaced, and many of the new workers will be hired for occupations different from those vacated by departing employees. Employment in the motor vehicle and equipment manufacturing industry is expected to grow with demand for motor vehicles and parts, but jobs will be lost due to downsizing and productivity increases. The growing intensity of international and domestic competition has increased cost pressures on manufacturers. In response, they have sought to improve productivity and quality through the application of high-technology production techniques, including robots, computers, and programmable equipment. Increasing productivity should mostly offset the increasing output of the motor vehicle and equipment manufacturing industry, resulting in slow job growth. In addition, the industry is increasingly turning to contract employees in an effort to reduce costs. Contract workers are less costly to hire and lay off than permanent employees; contract jobs also serve as a screening tool for candidates for permanent jobs that are more complex and require more skills. 

Growth in demand for domestically manufactured motor vehicles could be limited by a number of factors. A slowdown in the growth of the driving-age population, as the smaller post baby-boom generation comes of age may curb demand for cars and trucks. Also, foreign motor vehicle and parts producers will continue to control a substantial share of the U.S. market and, should they increasingly meet demand with imported vehicles and parts instead of products manufactured in U.S. transplant factories, domestic motor vehicle and parts output would be lower. Other factors that may limit growth of domestic motor vehicle production include improvements in vehicle quality and durability, which extend longevity, and more stringent safety and environmental regulations, which increase the cost of producing and operating motor vehicles. 

Employment in motor vehicle and equipment manufacturing is highly sensitive to cyclical swings in the economy. A 10- to 20-percent change in employment from one year to the next is not unusual. During periods of economic prosperity, consumers are more willing and able to purchase expensive goods such as motor vehicles, which may require large down payments and extended loan payments. During recessions, however, consumers are more likely to delay such purchases. Motor vehicle manufacturers respond to these changes in demand by hiring or laying off workers. 

Expanding factory automation, robotics, efficiency gains, and the need to cut costs are expected to keep employment from growing as fast as output. The movement towards efficiency and automation will force employment declines in machine setter, operator, and tender occupations. Employment of office and administrative support workers will grow slowly due to expanding office and warehouse automation. Automation and continued global competition, however, are expected to produce job growth for engineers, industrial production managers, business operations specialists, and computer specialists. These workers will increasingly be relied upon for further innovation in reducing costs and enhancing competitive advantage. 

Earnings

In 2000, 36.7 percent of workers in motor vehicle and equipment production were union members or were covered by union contracts, compared with 14.9 percent of workers throughout private industry. Unionization rates are higher in motor vehicle production than in parts and accessories producers. The primary union in the industry is the United Automobile, Aerospace, and Agricultural Implement Workers of America, also known as the United Auto Workers (UAW). Nearly all production workers in motor vehicle assembly plants, and most in motor vehicle parts plants, are covered by collective bargaining agreements negotiated by the UAW. Other unions—including the International Association of Machinists and Aerospace Workers of America, the United Steelworkers of America, and the International Brotherhood of Electrical Workers—cover certain plant locations or specified trades in the industry.

Source: Career Guide to Industries, Bureau of Labor Statistics

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