Impact of Kentucky Automotive Industry Tops $14 Billion

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).