Overall wage and salary employment in the motor vehicle and parts manufacturing industry is expected to increase 3 percent over the 2002-12 period, compared with 16 percent for all industries combined. Job loss in motor vehicle manufacturing will be more than offset by gains in firms manufacturing motor vehicle parts, bodies, and trailers. Employment is expected to decline by 6 percent in motor vehicle manufacturing, but increase by 4 percent in motor vehicle parts manufacturing and 12 percent in motor vehicle body and trailer manufacturing.
In addition to job openings due to growth in firms manufacturing motor vehicle parts, bodies, and trailers, the need to replace workers who retire or transfer to jobs in other industries will also generate job openings. Not all of the motor vehicle manufacturing workers who leave jobs in the industry 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 parts 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 parts 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 parts manufacturing is highly sensitive to cyclical swings in the economy. 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 assembler and fabricator occupations. Employment of office and administrative support workers will decline 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.