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Luke Tonachel’s Blog

New Report: Strong Vehicle Standards are Key to U.S. Jobs

Luke Tonachel

Posted August 9, 2011 in Green Enterprise, Moving Beyond Oil, Solving Global Warming, U.S. Law and Policy

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UPDATE, Aug 10: NRDC, UAW and NWF, identified a mistake in the supplier report issued yesterday. The jobs in North Carolina were overestimated. The actual number is 5,928. The corrected figure brings to 151,168 the total number of U.S. workers at automotive suppliers that make components for clean, fuel-efficient vehicles. The post below has been updated to reflect these changes and the interactive map and PDF of the report have been updated at http://www.nrdc.org/transportation/autosuppliers/.

On Thursday, President Obama will visit a Johnson Controls, Inc. advanced vehicle battery manufacturing plant in Holland, Michigan to speak about how strong fuel economy and carbon pollution standards can boost American jobs. We agree. A new report released today by NRDC, the automotive workers union UAW and the National Wildlife Federation shows that the production of cleaner cars and trucks is employing over 150,000 workers across the United States today. As vehicle standards ramp up and the production of clean vehicle technologies grow there is tremendous potential for job growth.

Supplier Report Figure 2 updated.PNG

View an interactive version of this map at http://www.nrdc.org/transportation/autosuppliers/, where you can select individual facilities to find the company name, products and employment.

The new NRDC-UAW-NWF report, titled “Supplying Ingenuity: U.S. Suppliers of Clean, Fuel-Efficient Vehicle Technologies,” catalogs over 300 companies with over 500 facilities across 43 states and the District of Columbia that are supplying the parts and components that make cars and trucks go farther on a gallon of fuel and emit less of the pollution that threatens our climate and health.

These suppliers and automaker component operations develop and produce the critical components for traditional, but advanced internal combustion engines and vehicles, for conventional hybrids and for emerging plug-in electric vehicles. Technologies include advanced combustion controls, turbochargers, improved transmissions, lightweight structures, electric traction motors, electronic controllers, advanced battery materials, traction batteries, and smart charging systems.

Supplier Report Table 1 updated.PNGThe states with the largest employment in the fuel-efficient parts supply chain are not just the traditional auto assembly states. While Michigan and Ohio are the top employers, thousands are also employed in North Carolina, Kentucky, Pennsylvania, Illinois, Virginia, Arizona, Texas and Alabama as well as other states.

The supply chain also suggests a melding of Midwest manufacturing prowess with West Coast Silicon Valley-type entrepreneurship. California is second only to Michigan in terms of number of facilities but the California facilities are typically smaller, indicating the start-up nature of new entrants into the automotive space driven by the need for fuel saving technologies, especially with hybrid and plug-in vehicles.

Fuel-efficient and low-emission vehicle component suppliers and automaker component operations are on the front lines of innovation, driven in part by the ramp up in fuel economy standards to 34.1 mpg by 2016 and expectations of further increases. A prime indicator of new innovation is patents. As the report notes, “In 2010, U.S. patents awarded for hybrid and electric vehicle technologies reached an all-time high, jumping 60 percent from the year before. General Motors, Toyota and Ford held the first, second, and third spots, respectively, for the most new patents in 2010. Largely due to the investments in the auto sector, Michigan is the home of the most U.S. clean energy patents granted from 2002 to 2010.”

Strong vehicle efficiency standards provide suppliers with the needed certainty that their investments in innovative, fuel-saving technologies will pay off. While today’s high oil prices may fuel current demand for clean, efficient vehicles, businesses greatly increase their risks if they rely solely on the volatile oil market to plan for the future.

Improved car and light truck standards to reach 54.5 mpg by 2025 announced recently by President Obama give suppliers a long-term signal for investment which leads to more jobs. Suppliers will make fuel-saving technologies that will be placed in increasing portions of the vehicle market. As the demand for the technologies grow, more engineers, managers, and construction and production workers will be needed to produce them. The report released today identifies over 150,000 workers building technologies mainly for the current vehicle pipeline, for which automakers typically plan three to five years ahead. Supplier employment is very likely to jump much higher with the upcoming, more forward-looking 2025 car standards and the first-ever fuel efficiency and carbon pollution standards for heavy trucks.

Developing and producing technologies that cut fuel consumption and pollution from vehicles represents an important opportunity to maintain and create domestic jobs. Suppliers employ more than 427,000 (or 61 percent) of the 700,000 direct workers in the auto industry. Recently announced strong standards provide the impetus for greater innovation that can lead to more jobs. (However, as my colleague David Doniger points out, Congressman Issa has launched a recent attack on the standards, which could undermine auto sector job growth.)

Strong standards are also the cheapest and fastest way to cut our nation’s oil dependence while reducing dangerous pollution that disrupts our climate. With more efficient vehicles we can improve our national and economic security. Instead of buying more oil, we’ll keep billions of dollars to invest in American jobs. Strong standards will put automotive engineers and production workers on the job, supplying ingenuity for cleaner, more fuel-efficient vehicles.

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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