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Economic Impact Study

Economic-Impact-Study

Auto Industry Contributes $14 billion to Kentucky

We all know that Kentucky and the automotive industry have formed a strong partnership for decades. Now we also know just how fruitful that relationship really is.

What we now know is that the industry contributes $14.3 billion to Kentucky’s gross state product (GSP) and directly or indirectly provides employment for 136,500 Kentuckians. This and other industry facts came to light after a six-month economic impact study conducted by researchers at the University of Louisville Urban Studies Institute.

“This report underscores what many automotive manufacturers and suppliers have known for years – Kentucky is a great place to do business and a great place to call home,” Gov. Steve Beshear said. “It details the tremendous contributions our automotive industry is making, bringing billions of dollars into our economy and supporting more than 136,000 high-paying jobs.”

As Gov. Beshear notes, not only is the industry bringing an abundance of jobs to the state, but with an average salary of $58,280 for manufacturing employees, those jobs often include high wages. The success of Kentucky’s auto industry isn’t just about the big name companies either.

“Kentucky’s automotive industry is more than Ford’s assembly plants in Louisville. More than GM’s Corvette plant in Bowling Green. And more than the Toyota and Lexus operations in Georgetown,” Beshear added. “This vital industry includes regional parts suppliers, tool-and-die shops, warehouses, trucking companies and metal-stamping operations throughout the Commonwealth.”

Other noteworthy findings from the study include:

  • Roughly $1 out of every $13 in the state’s economy is tied to the automotive industry.
  • Kentucky’s automotive manufacturers and suppliers contribute $6.1 billion to payrolls annually.
  • Auto-related businesses directly employ 85,552 workers at more than 470 establishments across the state.
  • Roughly 1 out of every 18 jobs in the state is supported by the direct, indirect or induced effects of automotive-related manufacturers.
  • $1 out of every $14 in state taxes results from the automotive industry. Annually, $488 million in state income and sales taxes come from industry-supported jobs.
  • Twenty percent of the state’s exports in 2014 were tied to the auto industry at a value of $5.9 billion.
  • Over the past five years, employers in Kentucky’s auto industry have announced $5 billion in investments and created nearly 20,000 new jobs.

While the statistics reflecting the auto industry’s impact on the state have been a major talking point over the past month, the study also reveals why Kentucky has been such a great fit for the constantly expanding industry.

First and foremost, Kentucky’s location has been an influential factor, as it is the shortest average distance to assembly plants in other states in the region, which makes it a prime location for automotive companies, especially Tier 1 suppliers who serve multiple manufacturers. Logistics plays a part as well, with the state’s interstates and parkways allowing companies to stay connected, and suppliers to have easy access to manufacturers. Auto facilities have primarily been locating in counties with four-lane, high-speed roadways.

There’s plenty of value in moving a company to Kentucky as well, with low utility costs, which, on average, are among the lowest in the nation. The growing workforce is the final piece of the puzzle unveiled by U of L’s study, noting that modernized automotive manufacturers are seeking a higher-skilled labor pool. Many auto companies have located in Kentucky to take advantage of customized training for potential workers through community and technical college systems.

“Automotive manufacturers and suppliers do business in two-thirds of Kentucky’s counties, and many are expanding their operations in the Commonwealth to meet the growing global demand for cars and trucks,” said Dave Tatman, executive director of KAIA. “We are pleased to provide the first clear picture of Kentucky’s auto industry to show citizens and leaders across the state who we are, where we are and how we are making Kentucky a national leader in automotive-related manufacturing and production.”

The Kentucky Automotive Industry Association (KAIA) commissioned U of L’s study, and the results showed exactly what the organization knew before the study began: Kentucky’s auto industry is thriving.

Download the complete economic impact study here.

AutoVision 2015

AutoVision-storyThe Road to the Future of Auto Starts Here

Self-driving cars. Lighter-weight vehicles. Long-lasting electric batteries. These products are being made a reality by the world’s greatest automotive minds. Many of those innovative thinkers will come together to share what’s next for the auto industry at the inaugural AutoVision Conference. The event will celebrate how far the automotive industry has come, and, more importantly, envision where it goes from here.

The two-day conference will be held at the Louisville Marriott Downtown on Sept. 14-15, and will feature more than 20 experts and industry leaders providing insight into how the auto industry can continue to grow while adjusting to an evolving marketplace.

Special guests will include Sheryl Connelly, manager of global consumer trends and futuring with Ford Motor Company, Mustafa Mohatarem, chief economist for General Motors, Doug Cain, CEO of Mubea North America, Pierre Abboud, president and CEO of Bosch, Kristin Dziczek, director of the industry and labor group with the Center for Automotive Research and many others.

Along with the diverse group of experts who will be in attendance to share insight into the future, guests will also have the option of getting an up-close look at the industry. Tours of Ford’s Louisville Assembly Plant will be offered, putting some of the changing technology on display.

“Over the last year, KAIA has taken great strides toward becoming an influential part of the future of business in the Commonwealth,” said Dave Tatman, executive director of KAIA. “With this inaugural AutoVision Conference, we want to emphasize that it is our goal to ensure that Kentucky and the auto industry continue to be closely intertwined for the foreseeable future.”

“Kentucky and the automotive industry have had a thriving partnership for decades, and the chance to host an event like AutoVision 2015 is an incredible opportunity for both the state and the industry,” said Larry Hayes, secretary of the Kentucky Cabinet for Economic Development. “The Cabinet is proud to have the opportunity to sponsor this event, which will bring together some of the best minds in the industry to discuss the future of auto manufacturing in the state. This conference will also be a great way for the Cabinet and industry leaders to network and build connections to ensure Kentucky’s automotive industry has even greater success in the future.”

With the industry enjoying great success in the current market, it’s easy to see why there is so much optimism for the future. AutoVision 2015 will begin the discussion of how to build upon that success, and how we can ensure the continued growth of the automotive industry together.

To register or to find out more about AutoVision 2015, visit www.AutoVisionConference.com.

Regional forums a success

Regional forums a success
More than 130 members and non-members attended six regional forums last month to learn more about the automotive industry’s economic impact on Kentucky. Attendees engaged in good discussion on topics including:

  • Workforce development: Finding workers with the right skill sets is an ongoing challenge, and the current skilled workforce is retiring. Fittingly, the forums were held on campuses of the Kentucky Community and Technical College System – and many KCTCS staff attended.
  • Image and perception: Manufacturing is not the dark and dirty work it might have been decades ago. Industry leaders, with the assistance of KAIA, need to educate tomorrow’s workforce about the plants of today.
  • Operational challenges: Concerns were expressed regarding wage pressure and the cost of workers’ compensation premiums. Technology has quickened the pace of engineering changes, putting pressure on supply logistics.
  • Opportunities: Small businesses enjoy the connections that KAIA affords them. Kentucky’s community banks, low utility costs and economic development entities give the Commonwealth an edge.

Part of KAIA’s mission is to provide a unified voice to advocate for the Commonwealth’s auto industry, and the forums provided plenty of feedback as we shape our platform and message going forward. We ask that our current members help us reach out to others who would benefit. We are stronger working together than separately.

Download the KAIA Forums PowerPoint

Economic Impact of the
Automotive Industry in Kentucky

Message from the Executive Director

Dave-Tatman-letter

Momentum continues to build for your Kentucky Automotive Industry Association! First and foremost, I want you to be aware of a major event coming up, and it’s one you absolutely will not want to miss. AutoVision 2015 will be our very first KAIA annual automotive summit. The event will be an exciting showcase focusing on the bright future of the auto industry in Kentucky and beyond. You can find additional details about the event in this newsletter. We are working very hard to ensure that our first conference has a global feel to it, with a large number of internationally known guests to address the audience. Make your plans now!

As you are no doubt aware, we recently released the results of our Automotive Economic Impact Study. The results of the study will assist KAIA and our industry members in educating the public about the importance of the industry and to develop strategies to further expand automotive-related manufacturing in the state. KAIA and industry leaders throughout the Commonwealth are looking to change the way Kentuckians view manufacturing, and the amazing results reflected in the economic impact study are the perfect place to start. Highlighted in this newsletter is commentary from Gov. Beshear and others who have had the opportunity to review the key points of the study and talk about the importance of our industry to the Commonwealth.

Following the release of the study, we proceeded into a round of regional forums throughout the state to roll out the specific details of the study to interested parties. These forums allowed KAIA to share information about business opportunities and to address any concerns industry leaders have about the rapidly changing auto industry. Thank you to the many members who were able to come out and join us. Many industry stakeholders who were not previously familiar with KAIA attended the sessions as well, and several have now joined our organization. The conversations and dialogue that took place at these forums will be invaluable as we move forward with our strategic planning for the future.

In closing, thanks again for your membership and your support of KAIA. We are very proud of the impact our industry has on the economy of Kentucky, and each and every one of you are playing a role in that. Encourage your circle of colleagues in other automotive companies to consider joining us today. And, as always, don’t hesitate to call me if you have any questions or comments.

See you in Louisville!

Dave

New Global Automotive Conference Coming to Louisville Sept. 14-15

AutoVision 2015 will focus on industry future, technology breakthroughs, such as self-driving cars, lighter-weight vehicles, electric power

LOUISVILLE, KY (July 15, 2015) – Automotive experts, manufacturers, suppliers and other business leaders will gather in Louisville Sept. 14-15 for a new, forward-looking automotive conference called AutoVision 2015.

The two-day conference at the Louisville Marriott Downtown is the creation of the Kentucky Automotive Industry Association, the organization representing the state’s $14 billion economic engine.

AutoVision_logo

Major advances such as self-driving cars, lighter-weight vehicles and long-lasting electric batteries will be among the topics discussed by leading experts from across the nation and beyond. Leaders from Kentucky’s major automotive manufacturers including Ford, General Motors and Toyota will be among the presenters.

“Forget the rearview mirror. Find out what’s over the horizon for the auto industry,” said Dave Tatman, KAIA’s executive director.

Gov. Steve Beshear, a leader in the expansion of Kentucky’s auto industry, will address the audience and the Kentucky Cabinet for Economic Development is the presenting sponsor. Speakers, panel discussions and breakout sessions will focus on cutting-edge technology and timely issues, including workforce training and regulatory changes, to help position business leaders for opportunities and growth.

Experts and leaders confirmed to date include:

  • Mustafa Mohatarem, Chief Economist, General Motors
  • Sheryl Connelly, Manager, Global Consumer Trends and Futuring, Ford Motor Co.
  • Doug Cain, CEO, Mubea North America
  • Pierre Abboud, President and CEO, Bosch
  • Mike Mullis, global site selection consultant
  • John Bradburn, Environmental Engineer, Chevrolet Europe
  • Lindsay Chappell, Automotive News bureau chief
  • Laurie Harbour, President and CEO, Harbour Results
  • Gary Silberg, KPMG’s national lead partner and author of “Me, My Car, My Life”
  • Thomas Croskey, Executive Director Manufacturing Strategy and Planning, General Motors
  • Dale Brosius, Chief Commercialization Officer, Institute for Advanced Composites Manufacturing Innovation

“The automotive world is changing rapidly, so communication is crucial to continuing economic success,” Tatman said. “As one of the nation’s top automotive states, we believe Kentucky has a responsibility to lead in thinking as well as doing. Bringing together some of the leading minds for a two-day summit will help the entire automotive industry — throughout the region, across the country and around the world.

Get more information and register at www.autovisionconference.com.

KAIA Legislative Approach a Resounding Success

The importance of the automotive industry to Kentucky was emphasized during the legislative session in Frankfort earlier this year.

Kentucky Automotive Industry Association executive director Dave Tatman gave presentations to both the House Standing Committee on Economic Development and to the Senate Standing Committee on Economic Development, Tourism and Labor during the General Assembly’s session. Tatman reviewed the organization’s mission and objectives and emphasized the economic impact of the industry in Kentucky, the numbers of Kentuckians employed and Kentucky’s importance on the international automotive stage.

The organization also hosted the inaugural KAIA Legislative reception where KAIA members had the chance to speak personally with various members of the Kentucky General Assembly about the challenges and opportunities facing the automotive industry.

“The Kentucky Legislature understands the importance of this industry on a global scale,” said Tatman, “and we very much appreciated their interest and attention during such a busy time. “Through these opportunities, I have been able to make contact with legislators from across the Commonwealth who want to know more about the industry and help facilitate its growth. This has been a very rewarding result of our overall efforts.”

Hydro-Gear to Expand Operations in Princeton

Transmissions manufacturer to create 40 new jobs

FRANKFORT, Ky. (June 9, 2015) – More jobs are coming to western Kentucky. Gov. Steve Beshear today announced that Hydro-Gear Limited Partnership is expanding its operations in Caldwell County.

Hydro-Gear, a designer and manufacturer of precision drive systems, plans to add up to 40 new jobs and invest $2.6 million into the project.

“Today’s announcement is a demonstration that Hydro-Gear continues to build on its growth as a leading global manufacturer in its field,” said Gov. Beshear. “We’ve worked hard with our community partners to make this region attractive to businesses, and that work is paying off. I’m proud of the new jobs and investment here. This is a great day for the Commonwealth, Princeton and Hydro-Gear.”

Hydro-Gear first located a manufacturing operation to Princeton in 2005. Now, the company plans to add more capacity, including the construction of a new 55,000-square-foot warehouse. This will allow Hydro-Gear to create more manufacturing space. The project is expected to be complete by the end of the year.

“When you have great team, it is amazing what can be done,” said Ray Hauser, president of Hydro-Gear. “We joined the Princeton community in 2005 to support our growth. We have attracted outstanding people that truly care and are motivated to perform for our customers every day. This facility expansion will allow us to enhance our customer service and provide solid employment opportunities for the local community.”

Headquartered in Illinois, Hydro-Gear is a global leader in the design and manufacture of precision drive systems. Working in partnership with manufacturers worldwide, Hydro-Gear produces an extensive line of high-performance, efficient hydrostatic transmissions and transaxles for industrial, commercial and consumer markets. The company currently employs more than 120 workers in central Kentucky.

“It is exciting for our community that Hydro-Gear is expanding its Caldwell County operations, which will create new job opportunities and provide a healthy boost to the local economy,” said Sen. Dorsey Ridley, of Henderson. “It also speaks highly of our dedicated workforce that this company is willing to make this investment. Hydro-Gear is a good corporate neighbor, and I look forward to a long, prosperous corporate partnership.”

“Hydro-Gear is an important part of our manufacturing community in Princeton,” said Princeton Mayor Danny Beavers. “This investment will assure continued growth and give us 40 new jobs for our community. The city of Princeton greatly appreciates Hydro-Gear choosing our community for its expansion.”

“I am extremely pleased that Hydro-Gear has chosen Princeton for their latest expansion,” said Caldwell County Judge-Executive Ellen Dunning. “They are a great asset to our community, and we are looking forward to a long and prosperous relationship. We appreciate the confidence they have shown by choosing to expand their Operations in Caldwell County.”

To encourage the investment and job creation, the Kentucky Economic Development Finance Authority preliminarily approved the company for tax incentives up to $800,000 through the Kentucky Business Investment program. The performance-based incentive allows a company to keep a portion of its investment over the term of the agreement through corporate income tax credits and wage assessments by meeting job and investment targets.

In addition, Hydro-Gear is eligible to receive resources from the Kentucky Skills Network. Through the Kentucky Skills Network, companies are eligible to receive no-cost recruitment and job placement services, reduced-cost customized training and job training incentives. Last year, the Kentucky Skills Network trained more than 84,000 employees from more than 4,100 Kentucky companies.

For more information on Hydro-Gear, visit www.hydro-gear.com.

A detailed community profile for Princeton (Caldwell County) can be viewed here.

Impact of Kentucky Automotive Industry Tops $14 Billion

Economic study says automotive producers and suppliers support 136,500 Kentucky jobs

LOUISVILLE, Ky. (June 3, 2015) – Joined by Gov. Steve Beshear and industry leaders, the Kentucky Automotive Industry Association (KAIA) shared results today of the first in-depth study of the significant fiscal and economic impact of Kentucky’s automotive industry.

The nearly six-month study was conducted by researchers at the University of Louisville Urban Studies Institute.

“This report underscores what many automotive manufacturers and suppliers have known for years – Kentucky is a great place to do business and a great place to call home,” Gov. Beshear said. “It details the tremendous contributions our automotive industry is making, bringing billions of dollars into our economy and supporting more than 136,000 high-paying jobs.”

“Kentucky’s automotive industry is more than Ford’s assembly plants in Louisville. More than GM’s Corvette plant in Bowling Green. And more than the Toyota and Lexus operations in Georgetown,” Beshear added. “This vital industry includes regional parts suppliers, tool-and-die shops, warehouses, trucking companies and metal-stamping operations throughout the Commonwealth.”

The U of L study is the first comprehensive look at the widespread and growing impact the automotive industry is having on the Commonwealth. It was commissioned by the Kentucky Automotive Industry Association (KAIA), an organization formed last year to address the industry’s challenges and opportunities for growth.

KAIA announced the study results in Louisville during an event at Integrated Manufacturing & Assembly. The plant, which employs 120 full-time workers, supplies seats for the Chevrolet Corvette and seating assemblies for several Mercedes-Benz models.

“IMA is a great example of the impact our industry is having on communities across Kentucky,” said Dave Tatman, executive director of the KAIA. “Automotive manufacturers and suppliers do business in two-thirds of Kentucky’s counties, and many are expanding their operations in the Commonwealth to meet the growing global demand for cars and trucks.”

“We are pleased to provide the first clear picture of Kentucky’s auto industry to show citizens and leaders across the state who we are, where we are and how we are making Kentucky a national leader in automotive-related manufacturing and production,” Tatman added.

Key findings from the report include:

  • The industry contributes $14.3 billion to Kentucky’s gross state product (GSP). Roughly $1 out of every $13 in the state’s economy is tied to the automotive industry.
  • Kentucky’s automotive manufacturers and suppliers contribute $6.1 billion to payrolls annually.
  • The average annual wage of a manufacturing employee in the automotive sector is $58,280.
  • Automotive-related businesses directly employ 85,552 workers at more than 470 establishments in Kentucky.
  • Automotive-related manufacturers and suppliers support 136,500 jobs in Kentucky. Roughly 1 out of every 18 jobs in the state is supported by the direct, indirect or induced effects of automotive-related manufacturers.
  • $1 out of every $14 in state taxes results from the automotive industry. A total of $488 million annually in state income and sales taxes come from industry-supported jobs.
  • One-fifth of the state’s exports last year were tied to the auto industry. The value of Kentucky’s automotive-related exports totaled $5.9 billion in 2014.
  • Existing and new employers in Kentucky’s automotive industry have announced $5 billion in investments over the last five years, and nearly 20,000 new jobs have been announced.

“The results of this study solidify that we are moving in the right direction,” said Louisville Mayor Greg Fischer. “Not on cruise control, but with the knowledge that the automotive industry will lead us down the long road into the future with high-paying jobs and economic development opportunities for our city, region and state.”

Tatman said the KAIA and its industry members will use the results of the U of L study to further educate the public about the importance of the industry and to develop strategies to further expand automotive-related manufacturing in Kentucky.

A series of industry forums will be held later this month on KCTCS campuses across the state to facilitate discussions about the industry, its challenges and opportunities. Details about the events can be found at http://kyautoindustry.com/events/.

“These forums are an opportunity for industry members, local and state leaders and our educators to be part of the conversation about the future of the automotive industry in Kentucky,” Tatman said. “We hope these conversations will help pave a path to continued prosperity for our state and the automotive industry.”

Gov. Beshear also announced that the state will host its first-annual automotive conference in September. The event will be held in Louisville and feature international experts and leaders from the automotive industry. More details about the conferences will be announced in coming weeks.

“Kentucky is recognized around the world as a hot spot for automotive manufacturing,” Beshear said. “This international conference will allow Kentucky to bring together industry leaders from across our state and around the world to see what’s creating a spark for growth in the Commonwealth.”

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The Kentucky Automotive Industry Association (KAIA) was established to advance and promote Kentucky’s automotive industry by providing leadership and creating collaborative partnerships. As the primary state association designed to unite Kentucky’s automotive manufacturers, suppliers and service providers, KAIA serves as a unifying voice that strives to anticipate and address common challenges and achieve shared goals. By creating a forum for best practice sharing, leveraging the expertise of world renowned automotive-related companies, the association seeks to further grow and strengthen the industry across the Commonwealth.

To learn more, visit http://kyautoindustry.com or follow the association on Facebook (https://www.facebook.com/kyautoindustry) or Twitter (https://twitter.com/KYAutoIndustry).