FDI in U.S. automakers could create automotive jobs

01.30.2012


U.S. automakers are drawing billions in foreign domestic investment (FDI), and this influx of capital could result in the creation of automotive jobs.
U.S. automakers are drawing billions in foreign domestic investment (FDI), and this influx of capital could result in the creation of automotive jobs.

U.S. automakers are drawing billions in foreign domestic investment (FDI), and this influx of capital could result in the creation of automotive jobs.

A plethora of new facilities and expanding operations are creating jobs across the country, according to Area Development Online. A perfect example of a state that is benefiting from this influx of capital from foreign investors is Ohio. Bowling Green is benefiting from a $100 million investment stemming from a company based in Canada. A company headquartered in Japan is currently investing $15.9 million into a facility in Sharonville, Ohio, that will produce a component used in a gas direct injection systems. The operation plans to be the source of 180 jobs by 2013.

Kentucky has also benefited from foreign direct investment into automotive manufacturing, the media outlet reports. A firm headquartered in France is investing $33 million into a facility that will require more than 400 employees. An investment of almost $100 million into a manufacturer of steering systems is expected to create 374 jobs, some of which could be filled by staffing agencies

The expansion of auto manufacturers also creates jobs by creating more demand for the input suppliers of carmakers. In Tennessee, major carmakers are planning to expand their operations, according to The Tennessean.

David Penn, an economist at Middle Tennessee State University, told the media outlet that every new job created at an auto manufacturer could generate as many as three new positions with the firms that supply them, many of which will be created close to the facilities of the automakers.

"In Tennessee, the ripple effect for job creation in auto manufacturing is the highest for any manufacturing sub-sector that we have," the economist told the media outlet. "As these plants build up and fill in with more of these suppliers, the jobs can only increase."

Referring to the tendency of suppliers to locate close to their clients, Jan McKeel, executive director of the South Central Tennessee Workforce Alliance, told the media outlet that "typically an auto manufacturer has suppliers close by because everybody has gone to a just-in-time inventory system to save money and operate more efficiently."

The addition of 1,300 jobs amid an expansion of a major carmaker's facility is expected to result in suppliers for the manufacturing creating 400 new jobs by late 2013, according to the media outlet. The automotive jobs created by the expansion are expected to increase over the next few years as the facility boosts production of various new vehicles.