Helping Drive California’s Economy
Hoping to bolster its contention that its U.S. operations benefit the California economy, an organization of seven Asian auto makers will release a study today saying the companies directly and indirectly accounted for 100,000 jobs in the state in 1995.
The study, conducted by UCLA’s Business Forecasting Project for the California Automotive Industry Alliance, also found that the jobs generated $4.4 billion in personal income in the state last year.
The alliance was formed last month to promote the economic contributions of its member companies--Japanese and Korean auto makers with U.S. subsidiaries based in Southern California. Its members include the domestic sales and marketing units of Honda, Nissan and Toyota in Torrance and Mazda, Kia, Mitsubishi and Suzuki in Orange County. These companies said they collectively imported 453,000 vehicles in 1995.
The job figures include administrative, sales and marketing personnel at the auto makers’ California headquarters, some dealership jobs, and manufacturing employment at a plant co-owned by General Motors Corp. and Toyota Motor Corp. in Fremont. The GM-Toyota plant is the only remaining auto manufacturing facility in California, as companies have shifted production to states with lower taxes and other costs.
The job total also includes employment generated in service industries as a result of the presence of the foreign auto makers.
Larry Kimbell, director of the UCLA forecasting group, called the auto industry jobs “a boon to the new California economy and a perfect example of the type of job for which California needs to compete.”
The findings provide further evidence, Kimbell said, that California’s move toward a service-based economy--and away from manufacturing--is not necessarily negative.
“Auto production has shifted away from California and will never come back,” he said. “But that doesn’t mean we can’t have auto industry jobs--and these are high-paying jobs.”
The study found that the average annual wage paid to the auto makers’ employees in California was $57,400 in 1995, second only to the legal profession’s average salary of $60,140. By contrast, the average engineering job in the state paid $47,022 last year, while the average entertainment industry salary was $46,486, the report stated.
The auto makers’ alliance also hopes to use the findings as ammunition in the ongoing auto trade dispute between the United States and Asian countries that has in the past raised the specter of tariffs or quotas on imported cars and trucks. Such restrictions could cost California more than 30,000 jobs at the seven companies, Kimbell said, and as much as 100,000 additional jobs indirectly generated by their business operations here.
Bob Thomas, chief executive at Nissan Motor Corp. in Torrance and chairman of the alliance, said that although there is no current effort to levy restrictions on foreign auto makers, the impetus for starting the association came in part from last year’s threat by the United States to impose 100% tariffs on 13 Japanese luxury cars.
That issue was resolved, but Thomas said the importers “basically saw a need, and sort of a PR responsibility that we had,” to raise awareness of the role that foreign auto makers play in the economy.
Andrew H. Card, president and chief executive of the American Automobile Manufacturers Assn., a Washington-based trade group, didn’t dispute the economic benefits arising from the foreign car makers’ U.S. operations.
But Card said he found it ironic that Japanese and Korean auto makers “are trumpeting the value of free trade in the U.S. They should be helping to open their markets in the same way they take advantage of our open market.”
