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Suppliers seek more clout

Josee Valcourt From The Detroit News| January 19,2007

In a move designed to win more political clout for auto parts suppliers, a major trade group representing parts makers will release a study today that found the industry employs more Americans than any other manufacturing sector, accounting for 4.5 million jobs.

The study, conducted for the Motor & Equipment Manufacturers Association by the Center for Automotive Research in Ann Arbor, found that motor vehicle parts suppliers directly employ 783,100 U.S. workers and that each of those jobs bolsters the economy by creating an additional 4.7 jobs.

The 103-year-old association says it hopes to use the findings to lobby lawmakers on the sector's behalf and tackle issues on Capitol Hill such as high health care and raw materials costs that are burdening the auto industry.

"We usually get thrown into the numbers with the car companies," said MEMA CEO and President Robert McKenna. "They talk about their direct employees plus who their parts suppliers are. Well, our organization represents the parts suppliers, and we felt we needed to have our voice recognized and have a seat at the table, particularly in Washington."

The study used government employment data for 2004, the most recent figures available.

Results of the study, which North Carolina-based MEMA says is the first to measure the economic impact of auto parts suppliers, will be released today during the annual Automotive News World Congress at the Hyatt Regency in Dearborn.

"It's the largest manufacturing industry, and most people don't really realize that," McKenna said. "We knew the number was big, but frankly (the study) even surprised us a little bit."

The study comes at a critical time for U.S. auto suppliers, which are facing challenges from global competition even as they lose business from domestic automakers that are steadily losing U.S. market share.

Last year, auto executives from General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group met with President Bush in an effort to win Washington's help in dealing with key manufacturing issues, and to address the auto industry's concerns about health care, fair trade and alternative energy.

But in many cases, auto suppliers, which are smaller than carmakers, have been more exposed to the cost pressures. Soaring health care costs spurred MEMA to conduct the study.

"In Washington, the only thing that really matters are votes," McKenna said. "The more people that you can represent, the more they're going to listen to you."

Kim Hill, associate director of economics in the business group at the Center for Automotive Research, said the study takes into account growth in the southern United States, where foreign automakers have built plants and suppliers have followed. But it does not reflect jobs lost since 2004 as the parts industry restructures amid struggles at Detroit automakers. Hill said what's most significant is jobs the industry creates.

"This just gives you a snapshot at one point in time," he said. "The multiplier effect is really the key number."

In a speech at the Automotive News World Congress on Tuesday, Tim Leuliette, chairman and CEO of Metaldyne Corp. in Plymouth, commented on Washington's lack of knowledge about the industry.

"I've spent quite a bit of time in Washington in the last year, and I am truly amazed at how little they know about the supplier network," Leuliette said, according to a copy of his speech.

Congressional members said the MEMA study could be a good start toward touting the industry's importance.

"Certainly, with $200 billion in production, nearly 800,000 directly employed and $4.5 billion in indirect production, these are huge numbers and they should point them out," U.S. Rep. Joe Knollenberg, R-Bloomfield Township, said Monday. He represents dozens of large auto suppliers, including Troy-based Delphi Corp.

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