TEXAS AUTOMOTIVE MANUFACTURING INDUSTRY REPORT

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T E X A S A U T O M O T I V E M A N U F A C T U R I N G I NDUSTRY R EPORT M ARCH 2010 www.texaswideopenforbusiness.com i The Texas Automotive Advantage Texas is a major player in the national automotive manufacturing marketplace and a top market for full-sized pick-up trucks and SUVs. The Lone Star State is nationally ranked in the top ten for automotive manufacturing employment and establishments, the size of its vehicle retail market, and vehicle registrations. Texas is a right-to-work state with a well established automotive manufacturing marketplace that is experiencing continued growth, despite the economic downturn.

The state is part of the growing NAFTA- spurred automotive corridor and is home to two major automotive manufacturing assembly plants operated by GM and Toyota. GM has manufactured vehicles in Arlington, Texas for over 50 years. Toyota opened a new Tundra truck plant in San Antonio in 2006, and in 2009 announced that Tacoma pick-ups will move production from California to Texas.

Government support; a large, growing, and highly trained work force; excellent educational and research institutions; a first-rate transportation and logistics infrastructure; and a top-ranked business climate all strengthen the ... more. less.

state 9s status as an automotive manufacturing leader. Contents A UTOMOTIVE MANUFACTURING O VERVIEW _______________________________________________ 1 T EXAS A UTOMOTIVE M ANUFACTURING I NDUSTRY M ARKETPLACE O VERVIEW ____________________ 1 T EXAS A UTOMOTIVE I NDUSTRY M ARKETPLACE S TATISTICS A ND E MPLOYMENT ___________________ 8 T EXAS T RUCK AND SUV M ARKETPLACE _________________________________________________ 13 T EXAS A UTOMOTIVE M ANUFACTURING R ECENT A NNOUNCEMENTS ___________________________ 20 A PPENDICES _______________________________________________________________________ 21 I NDUSTRY R ESOURCES _______________________________________________________________ 24 E NDNOTES ________________________________________________________________________ 25 I NDUSTRY R EPORT 1 A UTOMOTIVE MANUFACTURING O VERVIEW utomotive manufacturing is a mature industry that began commercial production in Europe in the 19 th century. The best known early automotive manufacturing pioneer is Henry Ford, who built his first car in 1896 and founded the Ford Motor Company in 1903. Ford became famous for pricing Model Ts competitively and perfecting the automotive assembly line production, which revolutionized the automotive manufacturing industry and mainstreamed automobile ownership in the United States (U.S.). The automotive manufacturing industry includes automobile and light truck manufacturers, motor vehicle body manufacturers, and motor vehicle parts and supplies manufacturers. This includes the manufacturing of complete automobile and light duty motor vehicles, motor vehicle bodies, chassis, cabs, trucks, automobile and utility trailers, buses, military vehicles, and motor vehicle gasoline engines. The auto parts area is divided into two segments: original equipment manufacturers (OEMs), which supply automotive manufacturers with parts for new vehicles, and the aftermarket parts suppliers, which manufacture replacement parts for used vehicles. A list of the major automotive manufacturing industry codes from the North American Industry Classification System (NAICS) follows. i NAICS 3361 Motor Vehicle Manufacturing NAICS 3262 Motor Vehicle and Trailer Manufacturing NAICS 3363 Motor Vehicle Parts Manufacturing T EXAS A UTOMOTIVE M ANUFACTURING I NDUSTRY M ARKETPLACE O VERVIEW Texas is a right-to-work state with a well established automotive manufacturing marketplace that is experiencing continued growth. The Lone Star State is nationally ranked in the top ten for automotive manufacturing employment and establishments, the size of its vehicle market and truck retail market, and vehicle registrations. Texas is part of the growing NAFTA-spurred automotive industry corridor, stretching across the state to the Mexican border, and is home to two major automotive manufacturing assembly plants operated by General Motors (GM) and Toyota. GM has manufactured vehicles in Arlington, Texas for over 50 years. Toyota opened a Tundra pick-up manufacturing plant in San Antonio in 2006 and in 2009, announced that Tacoma pickups will move production from California to Texas in 2010. Toyota 9s decision s to locate and expand in Central Texas Map Source: Bexar County Economic Development Department at http://txmxautomotive.com 2 underscores not only the state 9s importance as a large and growing truck market, but also the s tate 9s strategic location between the growing automotive manufacturing centers in Mexico and the Southern U.S. states. Government support; a large, growing, and highly trained work force; excellent educational and research institutions; a first-rate transportation and logistics infrastructure; and a top- ranked business climate all strengthen the state 9s status as an automotive manufacturing leader. The Lone Star State has committed substantial resources to support the automotive manufacturing industry. In 1987, the Texas Legislature created the ongoing Norman Hackerman Advanced Research Program (formerly the Advanced Research Program or ARP) and the Advanced Technology Program to award grants to fund scientific and engineering projects at Texas higher education institutions. In 2001, the Texas Legislature appropriated $800 million for science, engineering, research, and commercialization activities, including $385 million for research infrastructure. In 2003, Gov. Rick Perry and the Texas Legislature passed legislation authorizing the $295 million Texas Enterprise Fund (TEF), a cdeal - closing d fund created to attract businesses and new jobs to Texas. The TEF re-appropriated funding in 2005, 2007, and 2009 to help ensure the growth of Texas businesses and create more jobs throughout the state. As of March 31, 2010, over $8.8 million from the TEF have been awarded for automotive manufacturing-related projects. The following chart details how these projects have committed to creating 1,914 jobs. A UTOMOTIVE M ANUFACTURING -R ELATED TEF A WARDS (A RRANGED BY C OMPANY THEN D ATE ) Company / Entity City Jobs Project Description TEF Grant Caterpillar Seguin 1,714 New global assembly, test & painting facility $8,500,000 JTEKT Automotive (FKA Koyo Steering Systems) Ennis 200 Auto parts manufacturing plant expansion $333,000 TOTALS --- 1,914 --- $8.833 Million Source: Texas Office of the Gov., Economic Development & Tourism Division In October 2004, Gov. Rick Perry announced a state industry cluster initiative to stimulate long-term growth and economic development in six key areas. The Advanced Manufacturing industry cluster includes automotive manufacturing. In June 2005, Gov. Rick Perry announced the $200 million Texas Emerging Technology Fund (TETF) to promote and finance technological innovations across multiple industries, including advanced manufacturing. The TETF was renewed in 2007 with appropriations of approximately $180 million. In November 2 007, Gov. Rick Perry appointed 29 public and private sec tor leaders to the Governor 9s Competitiveness Council to identify the global market competitive issues and opportunities arising from the follow-up research on the six targeted industry clusters and make recommendations to address them. The Council 9s reco mmendations were completed in August 2008. Texas has become an important part of the new North American (N.A.) automotive corridor running from Mexico through a number of Southern U.S. states, which is increasingly comprised of foreign- owned automotive firms and their suppliers. The traditional U.S. automotive industry corridor begins in Michigan and runs down the East Coast; however, the majority of N.A. automotive plants built in the last two decades are in the Southern U.S. states and Mexico. Foreign-owned automotive firms tend to locate their operations in the Southern states and in non-union areas away from the traditional center of U.S. automotive manufacturing, and have encouraged their traditional 3 automotive suppliers to co-locate near their new U.S. operations. Spurred by the 1992 North American Free Trade Agreement (NAFTA), Texas links Mexico and its automotive maquiladoras to most of the U.S. automotive industry . The cNAFTA superhighway, d which runs through Texas as I - 35, serves as the main ar tery for the Southern U.S. and Northern Mexico region 9s automotive manufacturing industry. The region 9s large, skilled, cost -effective labor pool coupled with the NAFTA provision that qualifies any product of at least 62.5% American, Mexican, or Canadian products to be duty-free makes Texas more competitive than ever for automotive manufacturers. The following maps show automotive assembly and supplier plants in Texas and Northern Mexico and major Texas-based automotive manufacturers. NAFT A 9s impact is seen in Mexico 9s northeastern automotive manufacturing industry cluster located along the border of Texas. Mexico- located manufacturers in this growing cluster include GM, Toyota, BAE, Peterbilt, Freightliner, and Navistar International 3 all of which also have facilities in Texas. T EXAS -M EXICO N AFTA S UPERHIGHWAY Note: Black dots represent manufacturing plants; beige dots represent OEM Tier 1 suppliers; shaded region represents the NAFTA Superhighway Source: Bexar County Economic Development Department at http://txmxautomotive.com 4 M AJOR T EXAS A UTOMOTIVE M ANUFACTURERS Note: Orange dots represent OEM Tier 1 suppliers Sources: Office of the Governor & Bexar County Economic Development Dept. A selection of Texas automotive manufacturing marketplace highlights follow: Texas currently has 31 foreign trade zones (FTZs) and 28 U.S. ports of entry, more of each than any other state in the nation. The automotive manufacturing industry is one of the primary industries using the FTZ program. The primary purpose of FTZs is to stimulate desired economic activity around international trade. FTZs are sites within the U.S., in or near a U.S. Customs port of entry, where foreign and domestic merchandise is considered to be outside the country or outside of U.S. Customs territory. Certain types of merchandise can be imported into an FTZ without going through formal Customs entry procedures or paying import duties. Customs duties and excise taxes are due only at the time of transfer from the FTZ for U.S. consumption. U.S. ports of entry are responsible for daily port- specific operations. U.S. port personnel enforce the nation 9 s import, export, and immigration laws and perform inspections of most cargo and visitors entering the nation. In Calendar Year (CY) 2009, Texas had a total of 833,828 new vehicle registrations, according to the Texas Department of Motor Vehicles (DMV). Of those, 614,681 or 74 percent were new passenger vehicles (less than 6,000 lbs) and 219,147 or 26 percent were new pick-ups (trucks less than 1 ton). General M otors 9 (GM) Arlington, Texas plant builds the sports utility vehicles (SUVs) that have been among the company 9s most profitable vehicles, including the Chevrolet Suburban, which some call cthe national car of Texas. d The Arlington plant is considered one of GM 9s best in terms of quality and productivity; nonetheless, in early 2009 it was shut down for two months along with twelve other North American GM plants. During this shutdown, GM filed for Chapter 11 bankruptcy, restructured, and reemerged as a leaner firm focused on its core brands: Chevrolet, GMC, Cadillac, Buick, and Opel. GM remained the No. 1 U.S. automobile manufacturer in 2009 by vehicle sales market share with 19.58 percent, according to Ward 9s Automotive Group. 5 o Arlington is GM 9s only remaining plant for full-size SUVs: Chevrolet Tahoes and Suburbans, GMC Yukons, and Cadillac Escalades. All have been profitable vehicles, despite overall SUV sales declines in recent years. GM is also producing hybrid versions of the Tahoe, Yukon, and Escalade. The hybrids are being built on the same assembly line as the regular models at GM's Arlington assembly plant. o In January 2010, GM announced it was adding overtime shifts through April 2010 in Arlington in order to meet increased demand for its largest and highly profitable full-sized SUVs. The plant is operating at a level above what is typically considered 100 percent capacity. o In CY 2009, the GM Arlington plant produced 186,423 full-sized SUVs, down 33.3% from the 250,814 full-size SUVs produced in 2008. The following chart provides details. CY 2008-2009 GM Arlington Plant Production Brand & Model CY 2009 CY 2008 % Change Volume Cadillac Escalade 16,873 23,947 -29.5 Cadillac Escalade ESV 6,588 11,054 -40.4 Cadillac Escalade EXT 2,423 4,709 -48.5 Chevrolet Suburban 41,055 54,058 -24.1 Chevrolet Tahoe 73,254 91,578 -20.0 GMC Yukon 29,411 39,064 -24.7 GMC Yukon XL 16,819 26,404 -36.3 Totals/Average* 186,423 250,814 -33.3%* *Average Source: Chevrolet, Buick, GMC and Cadillac Post Sales Gains, Canada NewsWire, January 5, 2010 o GM 9s Arlington assembly plant celebrated its 50 th year in Texas in 2004. The 250- acre plant, with nearly 600 employees on one shift, has been expanded seven times since launching operations in 1954. Between 1996 and 2006, GM invested $910 million in the plant. In 2009, the plant employed approximately 2,250 people. GM 9s Arlington assembly plant operations have contributed significantly over the years to the state 9s economic growth and development. Source: http://theautomotivereporter.com/ In June 2004, GM announced a $160 million commitment for the expansion and renovation of its Arlington assembly plant, in preparation for building new trucks to be released beginning in 2007. The Arlington 6 City Council approved a tax abatement agreement for the GM expansion, which had increased to over $169 million; the fifth and most recent GM tax abatement Arlington has approved to date. In February 2003, Toyota officials announced that San Antonio, Texas was selected as the site of a Toyota truck assembly plant. A $133 million incentive package was extended to Toyota, including $27 million for job training and recruitment and $15 million for a rail district to build a second rail line to the plant. The Toyota Motor Manufacturing, Texas (TMMTX) plant, which began operations in November 2006, is expected to generate a $100 million annual payroll, add $2.4 billion to the Texas economy over the next decade, and represents a $1.6 billion investment. o In 2009, Toyota was the No. 2 U.S. automobile manufacturer by vehicle sales market share with 16.73 percent, according to Ward 9s Automotive Group. The firm also overtook GM to become No. 1 in global auto sales in 2009. o TMMTX directly employs 2,040 and indirectly employs 12,510 with $1,106.4 million in direct investment and $1,297.8 million in dealer investment, according to its 2009 U.S. Operations Brochure. TMMTX 9s 2006 payroll, the latest data available, totaled $51.9 million. o The 2,000 acre TMMTX site houses 21 suppliers who employ approximately 2,100 at full production and have cumulatively invested about $300 million. A chart listing the 21 TMMTX on- site suppliers is provided in Table 1 in the Appendices. Altogether, the TMMTX site employs more than 4,000 at full production. Aerial view of TMMTX Source: http://www.mysanantonio.com/news/special_reports/The_Toyota_plant.html o In November 2006, TMMTX officially opened its $1.28 billion dollar plant in San Antonio and began production of its Tundra full-sized pickups. TMMTX initially planned to roll 150,000 trucks off the assembly line annually, but decided to increase the plant's capacity to 200,000 before it even began production. o In July 2008, Toyota announced it would begin scaling back large vehicle production in the U.S. and would consolidate all Tundra truck production in San Antonio in 2009. Toyota had been producing the Tundra in both Texas and Princeton, Indiana. In fall 2008, the Tundra line was discontinued in Indiana. All Tundra production is currently out of TMMTX. o In August 2009, Toyota announced it was ending its Corolla and Tacoma production contract at the California-based GM joint venture, New United Motor Manufacturing, Inc. (NUMMI), on March 31, 2010. Toyota will shift production of Tacoma pickups to 7 its Texas facility and begin production in the summer of 2010. GM withdrew from the NUMMI joint venture as part of its bankruptcy reorganization, prompting Toyota to follow suit. Moving Toyota 9s smaller Tacoma pickup production to San Antonio represents $100 million in new direct investment, 850 new direct jobs, strengthens existing regional suppliers, and has a job multiplier of 1:5 (including suppliers), according to the Bexar Economic Development Department. Toyota Tacoma Source: Toyota o In 2009, TMMTX only produced 86,000 Tundra trucks, according to IHS Global Insight and Ward 9s Auto. Nationwide decreased full-size truck sales due the economic downturn caused this production scale back. o In January 2010, Toyota announced it would suspend U.S. sales of eight models, including Tundras, due to their involvement in faulty accelerator pedal recalls. In February 2010, Toyota announced it was temporarily suspending TMMTX production for a week in March and April to help deal with U.S. Tundra recalls issues. The 2007- 2010 Tundra models are affected by the sticky pedal/unintended acceleration recall; the 2000-2003 Tundra models are affected by corrosion issues. o In February 2010, TMMTX had returned to two shifts, full capacity, and was training all 2,500 plant workers for the new Tacoma truck production . That 9s on top of TMMTX hiring 900 new workers since October 2009. TMMTX expects to produce about 100,000 Tacoma trucks and up to 160,000 Tundra trucks in 2010. In February 2009, BAE Systems announced the opening of a 33,000 square, foot manufacturing facility in Austin, Texas where BAE will build its L-ROD cage armor kits for U.S. Army ground vehicles. The aluminum cages are bolted to trucks to safeguard them against weapons, but don 9t add significant weight, and can be serviced in the field. BAE 9s facility has a new, automated production line, has hired additional employees, and will enable BAE to build the systems under contract from the U.S. Army and the Marine Corps. The company says it has orders for $34 million worth of its L-ROD systems. BAE RG-31 Truck with L-ROD Source: BAE o In February 2010, UK-based BAE Systems learned that the U.S. Army rejected its appeal to keep a contract for the production of combat trucks in Sealy, Texas. BAE employs 3,000 in its plant west of Houston and had held this contract for 17 years. Instead, the $3 billion contract has been awarded to U.S.-based Oshkosh Corporation. BAE 9s contract expires in October 2010 and will likely be extended into spring 2011 as 8 Oshkosh ramps up for production. BAE is considering other opportunities for its state- of-the-art Sealy facility. o In March 2010, BAE Systems 9 Austin -based defense equipment unit signed a $45 million deal to provide heat-sensing cameras for the 2,399 military reconnaissance vehicles that Oshkosh will be manufacturing for the U.S. Army. In December 2008, the State of Texas announced that Caterpillar, an Illinois-based Fortune 500 company, was moving one of its primary global manufacturing facilities to Seguin, Texas. In January 2009, Caterpillar broke ground on its 1 million square foot new manufacturing facility in Seguin. The plant will create more than 1,700 new jobs and generate $169.7 million in capital investment. The facility will provide engines for Caterpillar machines and electric power generation, as well as petroleum, marine, and industrial customers, and will also consolidate and relocate its assembly, paint, and testing operations from Illinois and South Carolina. Texas invested $8.5 million from the Texas Enterprise Fund as a deal-closing incentive for this project, which should be operational by the end of 2011. In August 2004, Toyota supplier Koyo Steering Systems NA (now JTEKT Automotive Texas) received a Texas Enterprise Fund award of $333,000. Koyo announced it would build a 40 acre state-of-the-art automobile parts manufacturing plant in Ennis, Texas, which will employ 200 and generate a $30 million capital investment in the Texas economy. ii T EXAS A UTOMOTIVE I NDUSTRY M ARKETPLACE S TATISTICS A ND E MPLOYMENT Texas is a major player in the automotive manufacturing industry, as well as a top-ranked state vehicle retail marketplace. The s tate 9s well established industry has a long history that began in 1914, when the Ford Motor company built a regional Model T plant in Dallas. The Lone Star State serves as a U.S. regional hub for the automotive industry and has long been one of the largest and fastest growing states in the nation. Texas is also an important NAFTA automotive manufacturing trading partner, with billions of dollars in automotive manufactured goods shipped annually. Sharing the nation 9s longest contiguous border with Mexico, Texas is uniquely positioned as a NAFTA player near a significant emerging market in the global automotive manufacturing industry. According to the latest 2009Q3 Texas Workforce Commission (TWC) data, Texas has 542 automotive manufacturing establishments directly employing 27,216 at an average annual salary of almost $51,000. The following chart provides a snapshot of the 2009Q3 Texas automotive manufacturing industry, using the three major industry codes (NAICS). 2009Q3 Texas Automotive Manufacturing Industry Information NAICS Description Employees Establishments Avg. Weekly Wage Avg. Annual Pay 3361 Motor Vehicle Manufacturing 8,031 31 $1,396 $72,592 3362 Motor Vehicle and Trailer Manufacturing 5,828 191 $740 $38,480 3363 Motor Vehicle Parts Manufacturing 13,357 320 $806 $41,912 TOTALS/ AVERAGES * --- 27,216 542 $980.6* $50,994.6* Source: Texas Workforce Commission (TWC) Quarterly Employment & Wages Private establishments only 9 The latest annual national data from the U.S. Bureau of Labor Statistics (BLS) indicate that in 2008, Texas ranked No. 4 nationally (tied with Indiana) for automotive manufacturing establishments and No. 7 nationally for automotive manufacturing employment. In 2008, Texas directly employed 34,190 automotive manufacturing workers in 571 establishments at an average annual salary of over $47,947. The state 9s automotive parts sector (NAICS 3363) alone employed 16,375, representing 47.6 percent of this total. BLS data indicate that in 2008, the Texas automotive manufacturing industry felt the impacts of the national economic downturn with overall slight decreases in the state industry 9s employment and establishments, while wages slightly increased. For detailed Texas industry data by NAICS breakouts for the years 2004 through 2008, see Tables 2 through 5 in the Appendices. Most major Texas automotive manufacturing facilities are located in or near the Dallas-Fort Worth, San Antonio, and Houston metropolitan areas. The following TWC map shows the majority of core and ancillary Texas automotive manufacturing facilities are located in or near these three metropolitan areas. However, the map also indicates that automotive manufacturing facilities are scattered across the state, from the Texas Panhandle to the Rio Grande Valley and from El Paso to Texarkana. Texas Motor Vehicle Manufacturing 9s Core and Ancill ary Facilities Source: TWC Clusters Geographic Information System (GIS) at http://www.texasindustryprofiles.com/apps/gis/clustersgis/ , Accessed March 2010 Red = core; Blue = ancillary 10 The following chart lists some of the leading Texas companies engaged in the automotive manufacturing industry. They include firms in all three industry code breakouts (NAICS 3361, 3362, and 3363). T OP A UTOMOTIVE I NDUSTRY M ANUFACTURING C OMPANIES IN T EXAS (A RRANGED BY N UMBER OF E MPLOYEES ) Company City Sales Employees Business Description (NAICS) General Motors, Truck Group Arlington $100-$500 2,630 Truck assembly (3361) Global Tactical Systems (BAE Systems subsidiary) Sealy $1,200 2,400 Tactical vehicles (3361) Toyota Motor Manufacturing Texas, Inc. (TMMTX) San Antonio NA 2,000 Truck assembly (3361) Peterbilt Motors Denton $500 1,200 Heavy duty trucks (3361) Lear Corp. Arlington NA 650 Motor vehicle parts (3363) Stoneridge Electronics El Paso $50-$100 600 Motor vehicle parts (3363) S C S/Frigette Fort Worth $50-$100 600 Motor vehicle parts (3363) Autotronic Controls El Paso $420 500 Motor vehicle parts (3363) Dana Corporation Longview NA 500 Motor vehicle parts (3363) Loadcraft Industries Brady $130 420 Truck trailers (3362) Trico Products Brownsville $350 450 Automotive wiper systems (3363) AER Manufacturing Carrollton $120-$500 400 Gasoline engines & engine parts (3363) Stemco L.P. Longview $25-$100 380 Motor vehicle parts (3363) PJ Trailer Sumner $100 325 Truck trailers (3362) Lebus Manufacturing Longview $25-$100 319 Motor vehicle parts (3363) Solar Turbines DeSoto $25-$100 310 Gasoline engines & engine parts (3363) Federal-Mogul Corp., Systems Protection El Paso NA 300 Motor vehicle parts (3363) Four Seasons (Standard Motor Products division) Lewisville NA 300 Motor vehicle parts (3363) Maxair (Four Seasons division) Grapevine NA 300 Motor vehicle parts (3363) International Muffler Co. Schulenburg $350 300 Motor vehicle parts (3363) Load Trail Sumner $100-$250 300 Truck trailers (3362) Sources: Manufacturers News, Inc. 9s 2009 Texas Manufacturers Register , Company Websites Some Texas automotive manufacturing industry and marketplace highlights follow: The Southwest Research Institute (SwRI), headquartered in San Antonio, Texas, is one of the oldest and largest independent, nonprofit, applied research and development organizations in the U.S. Employing over 3,300, SwRI has over two million square feet of laboratories, test facilities, workshops and offices on over 1,200 acres. Its fiscal year (FY) 2009 total re venues were $564 million. SwRI 9s Office of Automotive Engineering brings together the world-class technical expertise and diversity of operations in S wRI 9s Fuels and Lubricants Research Division and Engine, Emissions, and Vehicle Research Division to more effectively offer complementary technologies to SwRI automotive clients. All are ISO certified. 11 o The Fuels and Lubricants Research Division has been in operation over 55 years and has an international reputation. A significant portion of SwRI is devoted to this division 9s Automotive Fleet Testing program, which handles many different makes and models of cars, both foreign and domestic. The Engine, Emissions and Vehicle Research Division conducts design, development, and test programs on a wide range of components, engines, transmissions, and vehicles. Freescale Semiconductor, headquartered in Austin, Texas, is the world 9s leading supplier of automotive industry semiconductors, with more than 30 years of experience. The firm is also the world 9s leading supplier of automotive 32 -bit power train microcontrollers (MCUs). Freescale technology is used in most new vehicles, including the complete hybrid drive train used in GM 9s Hybrid SUVs being manufactured in Arlington , Texas. Freescale has been a GM supplier for approximately 30 years. In October 2008, the two firms signed an agreement for Freescale to supply its advanced MCU technology for GM 9s green engine design. Texas had over 21.44 million registered motor vehicles in FY 2009, according to the Texas DMV. Over 11.4 million 3 or 53.4 percent 3 were passenger vehicles, which included automobiles, mini-vans, and most SUVs. Over 4.8 million 3 or 22.5 percent 3 were pick-up trucks. The following chart provides details on Texas vehicle registrations for FY 2002 through FY 2009. Texas Passenger Vehicles and Truck (Under 6,000 lbs.) Registrations Fiscal Year Total Passenger Vehicles <6,000 lbs. Total Trucks <6,000 lbs. (Pick-Ups) Total Vehicles Registered % Passenger of All Vehicles Registered % Trucks of All Vehicles Registered 2002 10,187,592 4,782,865 18,707,486 54.46% 25.57% 2003 10,174,751 4,444,883 18,621,915 54.64% 23.87% 2004 10,296,782 4,547,215 18,949,499 54.34% 24.00% 2005 10,517,928 4,642,187 19,144,792 54.94% 24.25% 2006 10,726,666 4,817,911 20,059,065 53.48% 24.02% 2007 11,069,564 4,774,226 20,864,318 53.06% 22.88% 2008 11,239,751 4,754,878 21,185,173 53.05% 22.44% 2009 11,453,354 4,824,660 21,446,721 53.40% 22.50% TOTALS 85,666,388 37,588,825 158,978,969 --- --- Source: Texas DMV, Vehicle Titles & Registration Division * Exempt registrations are included in pick-up truck counts and total vehicles registered. ** dPassenger <6,000 lbs. d includes automobiles, mini- vans, and most SUVs. cTrucks <6,000 lbs. d includes ½, ¾, and 1 ton trucks. ** *The Texas fiscal year begins on September 1 and ends on August 31 each year. NOTE: DMV changed how it calculates the number of vehicles registered in FY2005 to allow for the subtracting of replacements. The following chart indicates that the number of hybrid vehicles registered in Texas increased over 57.6 percent between 2006 and 2009, according to the TX DMV. The state 9s best-selling hybrid vehicle continues to be the Toyota Prius, followed by the Honda Hybrid Civic. Eight new hybrid vehicle models were registered in Texas in 2009. 12 Texas Hybrid Vehicles by 2009 Registrations Vehicle 2006 2007 2008 2009 Toyota Prius 11,490 19,465 27,617 31,026 Honda Civic 5,541 7,201 9,159 9,926 Toyota Camry 1,645 4,793 7,797 8,851 Chevrolet Silverado 4,347 5,937 5,896 5,861 Lexus GS450H 613 2,584 3.973 4,764 Lexus RX400H 2,627 3,605 4,400 4,753 Toyota Highlander 2,242 2,959 2.955 4,442 Honda Accord 1,527 1,741 1,738 1,758 GMC Sierra 929 1,636 1,625 1,624 Ford Escape 1,215 1,244 1,240 1,232 Chevrolet Tahoe * - - - 894 Honda Insight 678 653 632 612 Lexus LS600HL * - - - 586 Saturn Vue 83 434 427 418 Chevrolet Malibu * - - - 381 GMC Yukon * - - - 422 Mercury Mariner 142 215 220 226 Nissan Altima * - - - 126 Saturn AURA * - - - 79 Mercedes-Benz * - - - 25 Mazda Tribute * - - - 4 TOTALS 33,079 52,467 67,617 78,010 *New in 2009. Source: TX DMV, Vehicle Titles & Registration Division In 2009, Texas ranked No. 3 nationally for port level imports for vehicles-related goods (Harmonized Systems code 87: Vehicles, Except Railroad or Tramway, and Parts, Etc.) valued at almost $21.5 billion, according to U.S. Census Bureau data. NAFTA partner Mexico, with its automotive maquiladoras, accounted for most of this trade. The following map provides more details. 2009 T EXAS P ORTS 9 V EHICULAR I MPORTS BY C OUNTRY Source: WISERTrade, based on U.S. Census Bureau data 13 In 2009, Texas ranked No. 2 nationally for transportation equipment (NAICS 336) exports valued at over $14.37 billion, according to U.S. Census Bureau data. NAFTA partners Canada and Mexico accounted for most of this trade. For more details, see Chart 1 in the Appendices. Texas has approximately 304 motor vehicle parts manufacturers (NAICS 3363) employing approximately 11,335, according to the 2009 Texas Manufacturers Register. In 2008, Texas ranked No. 2 nationally with 18,207,948 registered all vehicle types and No. 2 nationally with 8,830,985 registered automobiles, according to the U.S. Department of Transportation 9s most recent Highway Statistics publication (2008). In 2007, Texas ranked No. 4 nationally for total automotive employment with 137,191 workers, or 6.2 percent of the U.S. total automotive workforce of 2.1 million, according to data from the Center for Automotive Research (CAR). These are the latest data CAR has published. According to the U.S. Census Bureau 9s 2008 Annual Survey of Manufacturers (ASM) , which is the most recent edition, Texas 9 motor vehicle manufacturing annual payroll increased slightly, while total capital expenses increased over 176 percent from $133.8 million to $276.7 million, most likely due to Toyota 9s San Antonio plant. E mployment and total value of shipments decreased slightly from the previous 2006 ASM . The following chart provides details. Also see Chart 1 in the Appendices. iii Texas Automotive Manufacturing Data NAICS Description Employees Annual Payroll ($1,000) Total Value of Shipments ($1,000) Total Capital Expenses ($1,000) 3361 Motor Vehicle Manufacturing 7,468 $532,811 $14,062,771 $276,759 3362 Motor Vehicle and Trailer Manufacturing 7,833 $278,856 $1,572,498 $23,447 3363 Motor Vehicle Parts Manufacturing 11,225 $469,685 $3,591,881 $70,078 TOTALS --- 26,526 $1,281,352 $19,227,150 $370,284 S ource: U.S. Census Bureau 9s 2008 Annual Survey of Manufacturers T EXAS T RUCK AND SUV M ARKETPLACE Texas is a growing manufacturing state and a top market for full-sized trucks, despite downward national trends. Texas is also known for sports utility vehicle (SUV) manufacturing, producing some of the nation 9s most popular and best selling models. In 2009, over one in five new vehicles registered in Texas were full- sized pickups and some of the nation 9s top -selling truck dealerships were in Texas. The Lone Star State is the single largest retail market for full-sized pickups, which is why some call it Truck Country. The state is No. 1 nationally for the number of pickup trucks registered, No. 2 for the number of total trucks registered, and No. 2 for the number of SUVs registered. 14 Most of the vehicles manufactured in Texas are built on light truck platforms. Texas has two major automobile manufacturers in the full-sized truck and SUV marketplace: GM and Toyota. The state is such an important large vehicle marketplace that the major U.S. automakers offer special edition trucks like the Ford cKing Ranch d 3 named for a famous Texas ranch - and the Dodge Ram cLone Star. d Japanese automakers have also targeted the Texas large vehicle marketplace. In 2004, Nissan announced the cTexas Titan d special edition full-size truck. Toyota sent engineers to study the Texas truck market, leading to the 1999 development of the Toyota Tundra, which began Texas production in 2006. Some Texas truck and SUV manufacturing marketplace highlights follow: In FY 2009, Texas had over 4.8 million registered trucks, representing 22.5 percent of all the state 9 s 21.4 million registered vehicles, according to TX DMV. This was a slight increase from the state 9s 4.5 million registered trucks in 2008. There were also slight increases in the ½ and ¾ ton truck segments. The following chart provides details on Texas pick-up truck registrations from FY 2002 through FY 2009. Texas Pick-Up Truck Registrations Fiscal Year ½ Ton Truck ¾ Ton Truck 1 Ton Truck Total Pick-Ups Trucks Total Vehicles Pick-Ups % of Total 2002 3,870,827 648,639 263,399 4,782,865 18,707,486 25.57% 2003 3,550,961 638,758 255,164 4,444,883 18,621,915 23.87% 2004 3,602,321 677,492 267,402 4,547,215 18,949,499 24.00% 2005 3,657,284 693,802 291,101 4,642,187 19,144,792 24.25% 2006 3,776,275 732,029 309,607 4,817,911 20,059,065 24.02% 2007 3,720,840 742,441 310,945 4,774,226 20,864,318 22.88% 2008 3,702,649 742,972 309,257 4,754,878 21,185,173 22.44% 2009 3,760,563 753,134 310,963 4,824,660 21,446,721 22.50% Source: Texas DMV, Vehicle Titles & Registration Division * Exempt registrations are included in pick-up truck counts and total vehicles registered. ** The Texas fiscal year begins on September 1 and ends on August 31 each year. NOTE: DMV changed how it calculates the number of vehicles registered in FY2005 to allow for the subtracting of replacements. Beginning with FY 2008, the number of vehicles currently registered is reported. According to Texas DMV, there were 219,147 new full-sized pick-up truck (trucks less than 1 ton) registrations in Texas in CY 2009. Nationwide, there were just over 1.4 million full- sized pickups sold in 2009. Assuming that new truck registrations equates with new truck sales, that means Texas accounted for 15.6 percent of the nation 9s new full -sized pickup truck sales in 2009. GM 9s Arlington, Tex as plant builds some of the company 9s most profitable SUVs. They include the Chevrolet Suburban and GM 9s new SUV hybrids. o In February 2006, GM announced that it would introduce the industry's first gasoline-electric hybrid full-size SUVs for the domestic market in 2007 and would build both of them in Texas. In September 2007 , the new Texas-built Chevrolet Tahoe and GMC Yukon Hybrid SUVs 3 the only hybrid full-size SUVs available in the market 3 were previewed at the Texas State Fair. GM 9s SUV hybrids em ploy a 15 two-mode hybrid system that GM developed in partnership with Germany's DaimlerChrysler and BMW. They boast a 30 percent gain in overall fuel economy and, during certain driving conditions, are entirely powered by electricity. o The 2008 Chevy Tahoe Hybrid was named the 2008 Green Car of the Year by the Green Car Journal . The 2008 GMC Yukon Hybrid won a Popular Mechanics 9 2008 Automotive Excellence Award for energy efficiency, Autobytel 9s 2008 Myride.com Hybrid of the Year award, and AUTOMOBILE Magaz ine 9s 2008 Technology of the Year award for its Two-Mode Hybrid System. 2008 GMC Yukon Hybrid Source: GM 2008 Chevy Tahoe Hybrid Source: GM o GM 9s Cadillac Escalade with Platinum HID Headlights won a Popular Mechanics 9 2009 Automotive Excellence Award for technical innovation. In 2008, the J.D. Power and Associates Initial Quality Study ranked the Cadillac Escalade No. 3 in the Large Premium Multi-Activity Vehicle Segment. 2009 Cadillac Escalade Source: GM o The Texas Auto Writers Association (TAWA) began holding a two-day truck contest and judging event called the Texas Truck Rodeo in 1993. The event has grown and matured over the years to include SUVs, national publication writ ers 9 participation, and to receive national and international industry recognition. In October 2008, TAWA winners included the 2009 GMC 2WD Yukon Hybrid as top full-size SUV and the 2009 Cadillac Escalade Hybrid as top full-size luxury SUV. Toyota has vigorously pursued the full-sized pickup market as an opportunity for growth in the U.S. In the competitive U.S. automotive marketplace, profits and even survival are focused on large pickup trucks 3 a high-volume, high-profit segment where Ford, GM, and Chrysler have traditionally accounted for the majority of U.S. sales. 16 o The 2010 Toyota Tundra was unveiled in February 2009 and arrived in dealerships that spring. The truck features a new 4.6-liter V8 engine. Toyota offered the Tundra Work Truck package, which subtracted as much as $655 from the price of the Tundra by eliminating many higher-end features, and the Platinum Package, priced at $5,140, which dressed up the CrewMax Limited version of the 2010 Tundra. The 2011 Tundra is expected to continue 2010 model changes, including the new V-8 engine. It should also include the brake-override system, installed to prevent unintended acceleration. 2010 Tundra Work Truck 2010 Platinum Tundra CrewMax So urce: Toyota o The 2009 Toyota Tundra was ranked No. 6 in the U.S. News & World Report 9s Full Size Pickup Trucks Rankings & Reviews, based on analysis of published reviews, test drives, and reliability and safety data. o In March 2010, J.D. Power and Associates, based on questionnaires sent to owners of 2007 model-year vehicles, ranked the Toyota Tundra No. 1 in the Large Pickup Segment for dependability. In 2008, the J.D. Power and Associates Initial Quality Study ranked the Toyota Tundra No. 2 in the Large Pickup Segment. o In 2008, the Toyota Tundra was named Motor Trend Magazine 9s 2008 Truck of the Year. o In January 2007, Toyota unveiled the most cmuscular d version of the Tundra, the CrewMax, at the North American International Auto Show in Detroit. Toyota executives called the redesigned Tundra their most important new product in 50 years. 17 Texas is home to a number of specialty truck and utility vehicle manufacturers. They include the following: S PECIALTY T RUCK & U TILITY V EHICLE M ANUFACTURING C OMPANIES IN T EXAS (A RRANGED BY N UMBER OF E MPLOYEES ) Company City Employees Business Description Global Tactical Systems (BAE Systems subsidiary) Sealy 2,400 Tactical vehicles Peterbilt Motors Denton 1,200 Heavy duty trucks Supreme Corp. of Texas Cleburne 255 Truck and bus bodies R K I, Inc. Houston 200 Truck and bus bodies Capacity of Texas Longview 150 Industrial trucks and trailers Homette Corp. Mansfield 125 Motors homes Manitou North America Waco 110 Rough terrain forklifts Terex Utilities San Antonio 100 Truck and bus bodies Navistar International Garland 90 Truck assembly Frazer Bellaire 85 EMS vehicles Sources: Manufacturers News, Inc. 9s 2009 Texas Manufacturers Register, company websites Navistar 9s Severe Service Truck Assembly facility in Garland, Texas builds the company 9s largest variety and complexity of vehicles. They include vehicles for the severe service, heavy duty, and medium duty markets, such as the International WorkStar, International PayStar, and the International MaxxPro Mine Resistant Ambush Protected (MRAP) vehicle, which is used for military applications. o In August 2008, Caterpillar and Navistar International signed a Memorandum of Understanding to pursue global on-highway truck business opportunities and cooperate on a variety of engine platforms. Caterpillar is targeting a 2010 introduction of a Cat-branded, heavy-duty truck for severe-service applications. The two companies have not finalized design and production details, although Navistar's Severe Service Center in Garland, Texas is a strong candidate location from which to launch the Cat nameplate vehicle. o In January 2009, the Canadian Department of National Defence awarded Navistar International a $231 million contract to provide up to 1,300 military commercial off- the- shelf vehicles, called MILCOTS, as the first element of Canada 9s Medium Support Vehicle System (MSVS) project. The vehicles will be built at Navistar 9s Garland, Texas facility. o In April 2009, Caterpillar and Navistar International signed an agreement to produce Caterpillar heavy- duty vocational trucks at Navistar 9s Garland, Texas facility for the North American market and formed a 50/50 joint venture to pursue global market opportunities. The new Caterpillar on-highway vocational trucks will be unveiled in late 2010 and are scheduled to go into full production in 2011. 18 o In February 2010, the U.S. Marine Corps System Command awarded Navistar Defense a $752 million contract to provide 1,050 International MaxxPro Mine Resistant Ambush Protected (MRAP) vehicles. Since May 2007, Navistar has received orders for 7,494 MRAP vehicles to date to help combat improvised explosive devices (IEDs) and other threats. The vehicles will be assembled at Navistar 9s Garland, Texas plant. Deliveries should be completed by summer 2010. International MaxxPro Das h MRAP Source: Navistar Navistar is nationally ranked No. 1 for MRAP orders from the U.S. government, according to a March 2010 Defense Industry Daily article. o In March 2010, Navistar International unveiled its new Class 4 and 5 TerraStar model at the National Truck Equipment Association's Work Truck Show. The TerraStar is geared for the growing medium truck market, which has opened up since GM ceased production last summer. It will be sold solely as a commercial vehicle and manufactured in Garland, Texas, beginning in fall 2010. TerraStar Source: Navistar Peterbilt Motors, a division of PACCAR Inc., is headquartered in Denton, Texas and has had Class 6-8 truck manufacturing facilities there since 1980. Peterbilt is considered one of the nation 9s premium quality truck manufacturers and offers the widest range of hybrid electric medium duty vehicles in the commercial truck industry. o In August 2008, Peterbilt Motors launched its new Green Technologies website to complement the first customer delivery of its Medium Duty Hybrid Vehicles. The vehicles feature reduced emissions and increased fuel economy. Model 335 Hybrid Source: Peterbilt o In September 2009, Peterbilt was honored as No. 1 in customer satisfaction among conventional medium duty truck customers, according to J.D. Power and Associates. Peterbilt has won this award in seven of the last ten years. 19 o On September 28, 2009, Paccar Inc. announced its Peterbilt division was permanently closing its Madison, Tennessee plant, where it had operations for four decades and employed as many as 1,100 people, and moving production to Peterbilt 9s Denton, Texas headquarters. The Madison factory had been idled since June 2008, when Peterbilt and the United Auto Workers Local 1832 were unable to agree on a new contract. In early 2009, Paccar executives made the shutdown semi- permanent, saying that they expected to restart work there when the industry and economy improved. Peterbilt 9s Denton , Texas plant is non-union. o In January 2010, Indiana-based Cummins Inc. was awarded $39 million from the U.S. Department of Energy (DOE) to work together with Peterbilt on the DOE 9s SuperTruck project. The goal of the SuperTruck program is to improve long-haul Class 8 vehicle freight efficiency through advanced and highly efficient engine systems and vehicle technologies that also meet prevailing emissions and Class 8 tractor-trailer vehicle safety and regulatory requirements. Texas has approximately 138 motor vehicle and truck trailer manufacturers (NAICS 3362) employing approximately 6,845, according to 2009 Texas Manufacturers Register. They include the following: M OTOR V EHICLE & T RUCK T RAILER M ANUFACTURING C OMPANIES IN T EXAS (A RRANGED BY N UMBER OF E MPLOYEES ) Company City Employees Loadcraft Industries Brady 420 PJ Trailer Manufacturing Sumner 325 Load Trail, Inc. Sumner 300 Supreme Corp. of Texas Cleburne 255 Ledwell & Son Enterprises Texarkana 250 Foretravel, Inc. Nacogdoches 225 RKI, Inc. Houston 200 Big Tex Trailer Mfg. Mount Pleasant 200 Heil Trailer International Rhome 170 Capacity of Texas Longview 150 Source: Manufacturers News, Inc. 9s 2009 Texas Manufacturers Register The following statistics are from the most recent edition of the U.S. Department of Transportation 9s Highway Statistics publication (2008). o In 2008, Texas had 9,284,324 trucks registered, up from 9,179,573 in 2007. Texas ranked No. 2 nationally for the number of total trucks registered in 2008, up from No. 3 in 2007. o In 2008, Texas had 3,442,943 SUVs registered, up from 3,282,513 in 2007. Texas ranked No. 2 nationally for the number of SUVs registered in 2008. o In 2008, Texas was ranked No. 1 nationally with 4,161,931 pickups, down from 4,182,560 pickups registered in 2007. iv 20 T EXAS A UTOMOTIVE M ANUFACTURING R ECENT A NNOUNCEMENTS In January 2010, publicly traded Ronn Motor Company announced that construction was well underway towards the completion of its new 76,000 square feet manufacturing facility and company headquarters in Marble Falls, Texas. The Marble Falls Economic Development Corporation and the City of Marble Falls contributed approximately $2.5 million toward the project. The new facility will feature a showroom, 10,000 square feet of executive offices, and an assembly plant outfitted with state-of-the-art equipment to begin production of the firm 9s Scorpion HX vehicles in 2010Q2. Ronn Motor is an automotive design, development and manufacturing company focusing on more environmentally conscious, sustainable automotive technologies. The Scorpion HX is a rear engine, hydrogen fuel injected hybrid vehicle that will compete in the limited edition, exotic car market with a $250,000 price tag. The Limited Edition Scorpion HX Source: Ronn Motor In September 2009, Cont inental Automotive Systems U.S., one of the world 9s leading automotive suppliers, announced it will close its automotive parts plant in Huntsville, Alabama by December 31, 2010, laying off more than 1,000 workers. Product lines made in the Huntsville will be shifted to facilities in Seguin, Texas and Nogales and Cuautla, Mexico. The announcement came a month after Continental warned that cutting costs in product development and manufacturing were necessary to save the company. It asked the United Auto Workers to agree to several concessions, which the union rejected. Continental has Texas facilities in Houston and Uvalde, as well as Seguin. v 21 A PPENDICES T ABLE 1 THE 21 TOYOTA MOTOR MANUFACTURING, TEXAS (TMMTX) ON-SITE SUPPLIERS Texas Operation Name Joint Venture Partners Minority Business Enterprise (MBE) Partners Commodity/ Service AGC Automotive Americas - - Glass assemblies ARK, Inc. - - Industrial waste management, recycling Avanzar Interior Technologies SAT Auto Technologies, Ltd. & Johnson Controls, Inc. (JCI) Berto Guerra Seats and interior parts Curtis-Maruyasu America, Inc. - - Tubing Futaba Industrial Texas Corp. - - Stamped parts Green Metals, Inc. - - Scrap steel recycling HERO Assemblers, LLP Valiente International Ventures & Toyota Tsusho America (TAI) Frank Herrera Assembly of tire onto wheel HERO Logistics, LLP Valiente Intl. Ventures & TAI Frank Herrera Logistics Kautex - - Fuel tank Metalsa - - Truck frames MetoKote - - E-coater Millennium Steel Service Texas, LLC Henry Jackson (Millennium Steel Service Indiana) & TAI Henry Jackson Steel processing PPG Industries, Inc. - - Glass assemblies Reyes-Amtex Reyes Industries & Amtex Fernando Reyes Interior parts Reyes Automotive Group Reyes Industries & Lear Fernando Reyes Interior/exterior parts Takumi Stamping Texas, Inc. - - Stamped parts Tenneco Automotive - - Exhaust systems Tokai Rika - - Functional Parts Toyoda-Gosei Texas LLC - - Interior/exterior parts Toyotetsu Texas - - Stamped parts Vutex, Inc. Operational Technologies Corp. & Vuteq Max Navarro Assembly services Source: Toyota Motor Company T ABLE 2 Texas Automotive Manufacturing Employment NAICS Description 2004 2005 2006 2007 2008 3361 Motor Vehicle Manufacturing 7,080 7,515 8,955 9,524 9,536 3362 Motor Vehicle and Trailer Manufacturing 8,100 8,593 9,788 9,589 8,279 3363 Motor Vehicle Parts Manufacturing 15,488 15,489 16,430 17,802 16,375 TOTALS --- 30,668 31,597 35,173 36,915 34,190 Source: BLS 22 T ABLE 3 Texas Automotive Manufacturing Establishments NAICS Description 2004 2005 2006 2007 2008 3361 Motor Vehicle Manufacturing 30 30 30 32 32 3362 Motor Vehicle and Trailer Manufacturing 208 203 203 215 207 3363 Motor Vehicle Parts Manufacturing 316 321 334 347 332 TOTALS --- 554 554 567 594 571 Source: BLS T ABLE 4 Texas Automotive Manufacturing Weekly Wages NAICS Description 2004 2005 2006 2007 2008 3361 Motor Vehicle Manufacturing 1,235 1,256 1,395 1,263 1,222 3362 Motor Vehicle and Trailer Manufacturing 639 380 699 704 742 3363 Motor Vehicle Parts Manufacturing 767 784 828 774 802 AVERAGES --- 880.3 806.6 974 913.6 922 Source: BLS T ABLE 5 Texas Automotive Manufacturing Annual Wages NAICS Description 2004 2005 2006 2007 2008 3361 Motor Vehicle Manufacturing 64,238 65,333 72,563 65,681 63,530 3362 Motor Vehicle and Trailer Manufacturing 33,207 35,369 36,334 36,607 38,594 3363 Motor Vehicle Parts Manufacturing 39,868 40,775 43,068 40,244 41,717 AVERAGES --- 45,771 49,159 50,655 47,510.60 47,947 Source: BLS 23 CHART 1 Motor Vehicle Industry Overview The motor vehicle industry (NAICS 3361, 3362, 3363) includes establishments that manufacture complete automobile and light duty motor vehicles (body and chassis) or chassis only. It also includes the manufacture of trucks, motor homes, trailers, engines, car parts and systems, and firms engaged in rebuilding motor vehicle engines and engine parts. Texas Industry Facts Firms 503 Establishments 516 Employment 27,216 Average Weekly Wage $1,396, $740, $806* Value Added Per Employee $232,699 Value of Shipments $19.2 billion Total Capital Investments $370.2 million Sources: Texas Workforce Commission - 2009Q3 Employment & Wages, Annual Survey of Manufactures, 2008 * NAICS 3361, 3362, 3363 How Texas Ranks NAICS 3361 3362 3363 All Employees 8 2 14 Production Workers 8 2 14 Value Added 5 2 13 Value of Shipments 6 2 14 Total Capital Investments 4 3 15 Source: Annual Survey of Manufactures, 2008 Texas Exports The export breakout that best fits this industry is ctransportation equipment, d which includes automotive, aircraft, railroad, ships, and missiles. Texas transportation equipment exports in 2009 were valued at $14.4 billion-down from $16.8 billion in 2008. In 2009, this was Texas 5 th largest exporting category. Source: WISERTrade, 2009 (NAICS 336) Top Export Markets Mexico $ 6,025,948,478 Canada $ 2,049,098,732 United Kingdom $ 553,412,670 Saudi Arabia $ 522,041,750 Germany $ 392,769,760 Source: WISERTrade, 2009 (NAICS 336) Major Industry Employers in Texas Company Location Product Description General Motors Arlington Truck & SUV assembly BAE Sealy Tactical vehicles Toyota Motor Mfg. San Antonio Pickup trucks Texas, Inc. (TMMTX) Peterbilt Motors Denton Heavy duty trucks Sanden International Wylie Automotive air conditioning compressor Source: Texas Manufacturers Register 2009 Recent Industry Trends 2009Q3 Texas motor vehicle industry firms, establishments and wages have decreased slightly, while employment decreased dramatically since 2008Q4. From 2006 to 2008, the overall Texas motor vehicle industry 9s Value Added per Employee decreased approximately 17%, Value of Shipments increased on average approximately 55%, and Total Capital Investments increased approximately 152%. Sources: Texas Workforce Commission - 2009Q3 & 2008Q4 Employment & Wages, Annual Survey of Manufactures, 2008 Office of the Governor - Economic Development & Tourism Spring 2010 T EXAS I NDUSTRY P ROFILE 24 I NDUSTRY R ESOURCES Alliance of Automobile Manufacturers (Auto Alliance or AAM) at www.autoalliance.org A U.S. industry association 9s website containing information on national and state market overviews, advanced technology innovations, and more. Automotive Aftermarket Association at www.aftermarket.org A U.S. industry association 9s website with free news items and industry research available for purchase. Automotive Aftermarket Suppliers Association (AASA) at www.aftermarketsuppliers.org A U.S. industry association website with some free market news and statistics. Automotive Industries (AI) at www.ai-online.com/ An industry trade publication website with free articles, news, and an auto suppliers directory area. Automotive News at www.autonews.com An industry trade publication website with free news and articles content. There is also a wealth of data available only to subscribers. Automotive Supplier Information at www.elm-intl.com/default.asp Elm International, Inc. produces this website, which contains some free news and searchable databases on auto suppliers, parts manufacturers, auto patents, and more. Muc h of Elm 9s in formation is only available to subscribers. Center for Automotive Research (CAR) at www.cargroup.org A U.S.-based research group produces this site, which contains some free publications. International Organization of Motor Vehicle Manufacturers (OICA) at www.oica.net This industry association 9s website contains free global manufacturing statistics and more. Motor & Equipment Manufacturers Association (MEMA) at www.mema.com/ This industry association website includes national level information, news, and more. Motor Vehicle and Parts Manufacturing at www.bls.gov/oco/cg/cgs012.htm This U.S. Bureau of Labor Statistics website offers text and tabular data on the U.S. automotive manufacturing industry. Texas-Mexico Automotive Supercluster (TMASC) Region website at http://txmxautomotive.com This Bexar County Economic Development website offers excellent, free automotive industry reports and statistics covering Texas statewide as well the Mexican states of Coahuila, Nuevo Leon, San Luis Potosi, and Tamaulipas. Transportation and Machinery Office at http://trade.gov/mas/manufacturing/OAAI/index.asp This U.S. Department of Commerce website offers reports, statistics, trade data, and more. Note the 2009 report U.S. Auto Parts Industry Annual Assessment and the 2009 report The Road Ahead for the U.S. Auto Industry . WardsAuto.com at www.wardsauto.com/ Ward 9s Communications has published news and analysis on the automotive industry for more than 75 years. Most of Ward 9s information is only available to subscribers, including the Ward 9s Automotive Yearbook and Ward 9s Motor Vehicle Facts and Figures publications. There is some free news and statistics. 25 E NDNOTES i Motor Vehicles & Passenger Car Bodies , Encyclopedia of American Industries, Gale, 2008; North American Industry Classification System : United States, 2007 , U.S. Office of Management and Budget, 2007. ii TMC to End Production Contract with NUMMI in March 2010 , Toyota Motor Corporation (TMC), August 28, 2009; Toyota Motor Manufacturing, Texas Inc. (TMMTX) website , http://www.toyota.com/about/our_business/operations/manufacturing/tmmtx/ , accessed March 2010; Texas-Mexico Automotive Supercluster (TMASC) Presentations , Bexar County Economic Development Department, http://txmxautomotive.com ; accessed March 2010; 2009 U.S. Operations Brochure , Toyota Motor Corporation, http://www.toyota.com/about/our_business/operations/ , accessed March 2010; U.S. Foreign Trade Zones Website , U.S. Dept. of Comm erce 9s International Trade Administration (ITA) at http://ia.ita.doc.gov/ftzpage/letters/ftzlist.html , accessed March 2010; U.S. Customs & Border Protection, U.S. Dept. of Homeland Security, http://www.cbp.gov/xp/cgov/toolbox/ports/ , accessed March 2010; Caterpillar Breaks Ground on Manufacturing Facility in Seguin , Office of the Governor Press Release, January 21, 2009; Caterpillar Moving Primary Manufacturing Facility to Texas , Office of the Governor Press Release, December 18, 2008; Caterpillar Bringing 1,400 Jobs to Area , Roger Croteau, San Antonio Express News, December 19, 2008; Perry Signs Bill Creating Emerging Technology Fund , June 13, 2005, http://governor.state.tx.us/news/press-release/3670/ ; Gov. Rick Perry Announces Strategic Plan to Create Jobs , October 20, 2004, http://governor.state.tx.us/news/press-release/4530/ ; Welcome to ARPATP.com , Texas Higher Education Coordinating Board, http://www.arpatp.com/ ; Toyota Begins Production in San Antonio 3 New Facility, 21 On-Site Suppliers Invest Nearly $1.6 Billion, Will Employ More Than 4,000 , Toyota Press Release, November 17, 2006; Toyota Begins Production in San Antonio 3 New Facility, 21 On-Site Suppliers Invest Nearly $1.6 Billion, Will Employ More Than 4,000 , Toyota Press Release, November 17, 2006; Governor Perry, Toyota Introduces More On-site Suppliers in Texas , Toyota Press Release, September 30, 2005; Governor Perry Joins Toyota to Introduce On-Site Suppliers in Texas , Toyota Press Release, December 16, 2004; Governor Perry Announces Toyota to Build Truck Plant in San Antonio , February 5, 2003, http://governor.state.tx.us/news/press-release/4371/ ; BAE Adding Austin Jobs to Build New Military Truck Protection System , Austin American Statesman, February 10, 2008 ; Chevrolet, Buick, GMC and Cadillac Post Sales Gains, Canada NewsWire, January 5, 2010; GM 9s Arlington Plant to Start SUV Production Again , Terry Box, The Dallas Morning News, July 12, 2009; City of Arlington FY 2010 Operating Budget , http://www.arlingtontx.gov/budget/pdf/operatingbudget_FY2010.pdf , accessed March 2010; Arlington City Council Tax Abatement History , http://www.arlingtontx.gov/business/taxabatementhistory.html , accessed March 2010; GM Plant in Arlington, Texas, to Build New Truck , Sean Wood, Fort Worth Star-Telegram, June 24, 2004; Tarrant County, Texas, Commissioners to Vote on Tax Breaks for General Motors , Amie Streater, Fort Worth Star- Telegram, June 9, 2004; Toyota Scales Back Production of Big Vehicles , Bill Vlasic and Nick Bunkley, New York Times, July 11, 2008; Toyota Princeton Plant Offering Buyouts to Employees , Dan Shaw, Evansville Courier & Press, February 12, 2009; For Toyota, Little to Celebrate at the Top , Phil Hirschkorn, CBSNews.com, February 28, 2009; Perry Announces Koyo Steering Systems to Expand in Ennis , August 2, 2004, http://governor.state.tx.us/news/press-release/4665/ ; Toyota to Halt Sales in U.S. of 8 Models /Output to Be Cut for Week over Pedals , Taro Koyano, Daily Yomiuri, January 28, 2010; Toyota Expands Tundra Pick-Up Recall in U.S ., Aaron Bragman, IHS Global Insight Daily Analysis, March 11, 2010; Toyota to Trim U.S. Production Government Calls for Company Documents , David Saleh Rauf, Houston Chronicle, February 17, 2010; Sealy Hopes for Tr

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