February 19, 2009

Where Are Our Cars Produced? The Auto Industry And Its Changing Geography

When the top executives from the "Big Three" auto manufacturers came to Washington to seek aid from the federal government they claimed that the domestic auto industry was vital to the overall U.S. economy. Certainly, it has been key to Michigan's economy for many decades. Yet while the state continues as the center of the U.S. auto industry, its role has been diminished as foreign automakers tended to locate their production facilites in the southern states. As a result, the geography of the auto industry has changed rather dramatically in the last 30 years.

In addition to the auto manufacturers, the auto industry includes many motor vehicle parts suppliers. That part of the industry is large -- parts suppliers contribute about 70% of the value added of a motor vehicle - but not as well understood as the assembly sector.

Dr. Thomas Klier from the Federal Reserve Bank of Chicago and co-author of the book, "Who Really Made Your Car? Restructuring and Geographic Change in the Auto Industry" joined the Capitol Hill Campus Program for a special look at the auto industry.