Kansas Automotive Manufacturing and Services

Transcription

1 2008 Kansas Automotive Manufacturing and Services Center for Economic Development and Business Research W. Frank Barton School of Business Wichita State University September

2 Kansas Automotive Manufacturing and Services Summary of Findings The Center for Economic Development and Business Research, W. Frank Barton School of Business, Wichita State University was given the task of analyzing various industry clusters in the state of Kansas. The objective is to review historical employment trends, identify strengths and weaknesses within the industry cluster, identify future occupational needs of the cluster and employers perceptions of the current workforce supply. Notable findings are listed below: Motor vehicles and parts dealers contributed to more than 12 percent of all retail sales tax revenues in the state of Kansas in Wyandotte County employed the most automotive manufacturing workers employed in 2006 with approximately 3,250 employees. Sedgwick County employed the most automotive service-based employees in 2006 with more than 1,600 employed. The automotive cluster in Kansas is expected to need 3,878 net new employees from 2004 to The state of Kansas is slightly below the national average for automotive employment concentration with an industry concentration of From 2004 to 2014 the automotive cluster is expected to need a variety of employees from accountants and auditors to drafters and technicians. Industry leaders perceive an abundant shortage in the white-collar professional group within the automotive cluster. Industry leaders perceive a need over the next years for employees with mechanical and technical skill sets, as well as computer skill sets. 2

3 Kansas Automotive Manufacturing and Services Defined The Automotive Manufacturing and Services Cluster refers to a variety of industries involved in the physical transformation, production or development of a material into a new, tangible product, both retail and wholesale trade and automotive repair and service. The cluster is defined by the North American Industrial Classification System as sectors 3361, 3362, 3363, 441, 4231 and Kansas Strengths Motor Vehicle and Parts Dealers The motor vehicle and parts dealers sector employed more than any other sector in the cluster, 18,493 individuals in This is 46.6 percent of the entire cluster. According to the Kansas Department of Revenue the motor vehicle and parts dealers sector contributed $241.7 million in sales tax revenues in Kansas in 2007, or 12.6 percent of all retail sales tax revenues. Key Locations The number of automotive manufacturing and service employees is largest in Sedgwick County, Johnson County and Wyandotte County, respectively. Johnson County employees received the highest annual average wage in automotive manufacturing and services. Sedgwick County had the largest number of automotive manufacturing and service establishments in Wyandotte County employed the most automotive manufacturing personnel in This is partially due to the General Motors Corp. plant in the Kansas City MSA. 3

4 What s next for Automotive Manufacturing and Services? Automotive manufacturing and services is an important industry in the Kansas economy. Automotive manufacturing and service companies supplied 3.5 percent of all employees in the Kansas economy in The average annual wage in the automotive manufacturing and service cluster in the state of Kansas in 2006 was $30, Nationally, the automotive cluster is expected to increase in total employment from 2006 to 2016 by 6.8 percent. The manufacturing portion of the cluster is expected to decline by 14.3 percent indicating the strong growth in the service portion of the cluster, a growth expected to reach 13.9 percent from 2006 to The automotive cluster in Kansas is expected to increase from 2004 to 2014 by an estimated 9.7 percent, or a 3,878 position increase. However, the total openings by 2014 are expected to surpass 13,545 positions due to employee turnover and retirement. The occupations with the largest concentration of positions in automotive manufacturing and services in the state of Kansas in 2004 included automotive service technicians and mechanics, retail salespersons, cleaners of vehicles and equipment and team assemblers. These occupations require on-the-job training, work experience in related occupations and post-secondary technical education. Automotive Manufacturing and Service Employment Year-Over-Year Growth, Kansas and U.S. 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% 12.3% 5.5% 6.3% 1.2% -2.7% 1.5% -3.6% -0.4% -1.6% -1.0% KS US Source: County Business Patterns, U.S. Census Bureau, The average annual wage for the automotive cluster is without that of the motor vehicle manufacturing sector due to suppressed data. 4

5 Kansas Automotive Cluster Statistics (2006) Number of Establishments 3,683 Number of Jobs 39,678 Percent of All Kansas Jobs 3.5% Average Annual Automotive Cluster Wage 2 $30,005 Total Automotive Wages Paid $1.2 billion Level Change in Total Wages Paid from 2001 $217.4 million Percent Change in Total Wages Paid from % Employment Location Quotient 0.99 Source: County Business Patterns, U.S. Census Bureau, Kansas Automotive Cluster Industry Employment Levels Rank Industry Sector Employed Percent of Cluster 1 Motor Vehicle and Parts Dealers 18, % 2 Automotive Repair and Maintenance 8, % 3 Motor Vehicle Manufacturing 3, % 4 Motor Vehicle and Motor Vehicle Parts and Supplies Merchant Wholesalers 3, % 5 Motor Vehicle Parts Manufacturing 2, % 6 Motor Vehicle Body and Trailer Manufacturing 2, % Kansas Automotive Cluster 39, % Source: County Business Patterns, U.S. Census Bureau, Top Five Automotive Cluster Counties by Employment Rank County Employed Percent of Cluster 1 Sedgwick, KS 6, % 2 Johnson, KS 6, % 3 Wyandotte, KS 6, % 4 Shawnee, KS 2, % 5 Reno, KS 1, % Balance of Kansas Automotive Cluster 17, % Kansas Automotive Cluster 39, % Source: County Business Patterns, U.S. Census Bureau, The average annual wage for the automotive cluster is without that of the motor vehicle manufacturing sector due to suppressed data. 5

6 Employment and Wages Kansas Automotive Manufacturing and Services

7 Employment and Wages Kansas Automotive Manufacturing and Services 2008 *Industry Concentration refers to the industry concentration in Kansas versus the industry concentration in the U.S. A concentration is relative to the respective geographies total employment. 7

8 Summary of Kansas Automotive Cluster Industry Sectors by Total Employment Industry Sector Employment Industry Concentration* Number of Establishments Total Wages Paid ($1,000's) Average Annual Wage^ Motor Vehicle and Parts Dealers 18, ,569 $642,460 $34,741 Automotive Repair and Maintenance 8, ,780 $216,990 $26,766 Motor Vehicle Manufacturing 3, N/A N/A Motor Vehicle and Motor Vehicle Parts and Supplies Merchant Wholesalers 3, $141,389 $37,957 Motor Vehicle Parts Manufacturing 2, $96,188 $32,116 Motor Vehicle Body and Trailer Manufacturing 2, $93,525 $35,861 Automotive Cluster Total 39, ,683 $1,190,552 $30,005 Source: County Business Patterns, U.S. Census Bureau, N/A refers to suppressed data. *Industry Concentration refers to the industry concentration in Kansas versus the industry concentration in the U.S. A value above 1 indicates a stronger concentration in Kansas than that of the U.S. A value equal to 1 indicates the same level of concentration in Kansas versus the U.S. A value below 1 indicates a weaker concentration in Kansas versus that of the U.S. ^The average annual wage for the automotive cluster is without that of the motor vehicle manufacturing sector due to suppressed data. Kansas Automotive Cluster Employment Distribution, % 9% 7% Motor Vehicle Manufacturing Motor Vehicle Body and Trailer Manufacturing 8% Motor Vehicle Parts Manufacturing 9% Motor Vehicle and Motor Vehicle Parts and Supplies Merchant Wholesalers Motor Vehicle and Parts Dealers 47% Automotive Repair and Maintenance Source: County Business Patterns, U.S. Census Bureau,

9 5 Key Occupations The Occupational Alignment used in this portion of the analysis is based on the Kansas Department of Labor s Occupational Outlook and degree completions obtained through the Kansas Board of Regents. An Index (in bold) was calculated based strictly on economic criteria. Equal weights were given to four criteria including the Median Annual Wage, Base Year Employment (2004), Total Openings (2004 to 2014) and the Additional Training Needed. Indices can range from 0 to 4. The larger the index value, the higher the economic impact the occupation has in Kansas. Below are three charts listing various Automotive Manufacturing and Service Occupations. The first table illustrates employment needs at all education levels. The second table illustrates employment needs for bachelor degree holders. The third table illustrates employment needs for technical education, certificate programs and associate degree holders. It is important to keep in mind, occupations were ranked based on the calculated index mentioned above and the occupational openings DO NOT include current shortages. Please see page 14 for definitions concerning the tables below. Occupational Alignment, Kansas Automotive Cluster, All Levels Occupational Title Educational Attainment Median Annual Wage (2004) Base Year Employment (2004) Projected Year Employment (2014) Total Openings (2004 to 2014) Total Completers Training Leakage Total Number Needed to Be Trained Additional Trained Workers Needed Index 1. General and Bach + $69, % Operations Managers 2. Sales Representatives, Moderateterm $50, Wholesale and Manufacturing, Except Technical and Scientific Products On-the- Job Training 3. First-Line Work $50, , Supervisors/Managers of Mechanics, Installers, and Repairers Experience in a Related Occupation 4. Sales Managers Bach + $80, % Financial Managers Bach + $74, %

10 Occupational Alignment, Kansas Automotive Cluster, Bachelor s Degree ONLY Educational Attainment Median Annual Wage (2004) Base Year Employment (2004) Projected Year Employment (2014) Total Openings (2004 to 2014) Total Completers Training Leakage Total Number Needed to Be Trained Additional Trained Workers Needed Occupational Title Index 1. Accountants and Auditors Bachelor's $48, % Industrial Engineers Bachelor's $62, % Mechanical Engineers Bachelor's $67, % Credit Analysts Bachelor's $43, % Business Operations Specialists, All Other Bachelor's $51, % Occupational Alignment, Kansas Automotive Cluster, Technical Education or Associate s Degree Occupational Title 1. Bus and Truck Mechanics and Diesel Engine Specialists 2. Drafters, All Other 3. Industrial Engineering Technicians 4. Automotive Service Technicians and Mechanics 5. Mechanical Drafters Educational Attainment Median Annual Wage (2004) Base Year Employment (2004) Projected Year Employment (2014) Total Openings (2004 to 2014) Total Completers Training Leakage Total Number Needed to Be Trained Additional Trained Workers Needed Index Postsecondary vocational training $34, % Postsecondary vocational training $44, % Associate degree $42, % Postsecondary vocational training $33,800 4,850 5,423 1,860 2, % 2, Postsecondary vocational training $39, %

11 Available Workforce as Perceived by Cluster Industry Leaders Docking Institute of Public Affairs personnel interviewed leaders from automotive manufacturing and service companies in the State of Kansas from May 26 to June 6, Ten industry leaders were interviewed. The sample was not randomly drawn. Rather, the employers with the largest workforces were targeted for interviewing. The responses shown in this report are suggestive and not inferential similar to that of a focus group. Interviews were designed to assess industry leaders perceptions of strengths and weaknesses of their cluster s workforce quality and supply in Kansas, types of training on basic and industryspecific skills most needed among new hires, and anticipated growth in cluster workforce needs over the next 10 to 15 years. Occupational Segmentation as Perceived by Industry Leaders Automotive Industry Workers Low- and Semi-Skilled Blue-Collar 37% Clerical and Office Staff 13% White-Collar Professionals 9% High-Skilled Blue-Collar 39% Engineers, Designers, Others 2% Additional Training Needs as Perceived by Industry Leaders Thinking about your industry in the next years, in what areas do you think future employees will need additional training or improvement? 1. Mechanical/Technical Skills 2. Computer Operation Skills 3. Interpersonal Relationship Skills 4. Work Ethic/Responsibility 11

12 Job Categories Job Categories Kansas Automotive Manufacturing and Services 2008 Supply of Workers by Skill Level Automotive - Supply of Workers Low- and Semi-Skilled Blue-Collar High-Skilled Blue-Collar Engineers, Designers, Others White-Collar Professionals Abundant Supply Adequate Supply Small Shortage Large Shortage Clerical and Office Staff Number of Respondents Ease of Hiring by Skill Level Automotive - Ease in Hiring Good Workers Compared to 5 Years Ago Low- and Semi-Skilled Blue-Collar High-Skilled Blue-Collar Engineers, Designers, Others White-Collar Professionals Easier About the Same More Difficult Clerical and Office Staff Number of Respondents 12

13 Education Levels Kansas Automotive Manufacturing and Services 2008 Preparation of New Hires Automotive - Preparation of New Hires Coming to Work with... With Advanced Degree Leaving College Very Prepared Somewhat Prepared Not Prepared Leaving CC/Tech School Leaving High School Number of Respondents Skill Sets Needed Thinking of skills or skill sets needed at the workplace, are there certain skills that seem to lack or that could be improved upon? 2. Communications Skills 3. Mathematics Skills 4. Team Work Skills High School Graduates 1. Work Ethic/Responsibility Community College or Technical School Graduates 5. Material Handling Skills 5. Work Ethic/Responsibility 1. Communications Skills 1. Management Skills Four Year, Advanced, and Specialized Degree Holders 2. Team Work Skills 2. Communuications Skills 3. Hands-On Experience with Tools 3. Social Skills/Interaction Skills 4. Hands-On Experience with Engines 4. Hands-On Experience in General Training Needs Public Education Might Address When thinking about new AND current workers, do you have industryspecific training needs that the public education system might appropriately address? 1. Advanced Math Skills 2. Welding Skills 3. Knowledge of Specific Technologies 4. Work Ethics/Responsibility 13

14 Definition of Terms Cluster refers to the concentration of employment within a given industry or industry sector within a given region. Industry Concentration refers to the concentration of employment within a given area relative to the United States. Industry Concentrations were calculated by dividing a given area s percentage of employment within a given industry, relative to all employees, by the nation s percentage of employment within a given industry, relative to all employees in the nation. An industry concentration above one implies a strong or high potential industry concentration within the given area; a low industry concentration implies a weak or low potential industry concentration within the given area. Educational Attainment refers to the required level of education needed to obtain a job in the respective occupational code. Total Openings refers to the total number of job openings from turnover and from occupational growth in the respective occupational code. Total Completers refers to the expected number of instructional program completers attributable to the respective occupation from 2004 to This analysis assumes a constant annual rate of instructional program completers based 0n 2006 completer numbers obtained through the Kansas Board of Regents. Training Leakage refers to the number of program completers that are not expected to work in Kansas six-months after degree completion based on data provided by the Kansas Board of Regents. Total Number Needing to Be Trained refers to the number of program completers needed to fill all job openings from 2004 to 2014 in the respective occupation taking into account the training leakage rate. Additional Trained Workers Needed is the difference between the Total Number Needing to Be Trained and Total Completers. Index refers to the ranking criteria used in the occupational alignment. Equal weights were given to four criteria including the Median Annual Wage, Base Year Employment (2004), Total Openings (2004 to 2014) and the Additional Training Needed. Indices can range from 0 to 4. The larger the index value, the higher the economic impact the occupation has in Kansas. 14