Download - Kansas Automotive Manufacturing and Services
Kansas Automotive Manufacturing and Services 2008
1
2008
Center for Economic Development and
Business Research
W. Frank Barton School of Business
Wichita State University
September 2008
Kansas Automotive Manufacturing and Services
Kansas Automotive Manufacturing and Services 2008
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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 2007.
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 2014.
The state of Kansas is slightly below the national average for automotive employment
concentration with an industry concentration of 0.99.
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 10-15 years for employees with
mechanical and technical skill sets, as well as computer skill sets.
Kansas Automotive Manufacturing and Services 2008
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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 8111.
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 2006. 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 2006.
Wyandotte County
employed the most
automotive manufacturing
personnel in 2006. This is
partially due to the General
Motors Corp. plant in the
Kansas City MSA.
Kansas Automotive Manufacturing and Services 2008
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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 2006. The average annual wage in the automotive manufacturing and
service cluster in the state of Kansas in 2006 was $30,0051.
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 2016. 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.
Source: County Business Patterns, U.S. Census Bureau, 2006.
1 The average annual wage for the automotive cluster is without that of the motor vehicle manufacturing sector due to suppressed data.
-3.6%
5.5%6.3%
-2.7%
1.2%
-1.6%
12.3%
1.5%
-1.0%-0.4%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2002 2003 2004 2005 2006
KS US
Kansas Automotive Manufacturing and Services 2008
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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 Wage2 $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 2001 22.3%
Employment Location Quotient 0.99
Source: County Business Patterns, U.S. Census Bureau, 2006.
Kansas Automotive Cluster Industry Employment Levels
Rank Industry Sector Employed Percent of Cluster 1 Motor Vehicle and Parts Dealers 18,493 46.6%
2 Automotive Repair and Maintenance 8,107 20.4%
3 Motor Vehicle Manufacturing 3,750 9.5%
4 Motor Vehicle and Motor Vehicle Parts and Supplies Merchant Wholesalers 3,725 9.4%
5 Motor Vehicle Parts Manufacturing 2,995 7.5%
6 Motor Vehicle Body and Trailer Manufacturing 2,608 6.6%
Kansas Automotive Cluster 39,678 100.0% Source: County Business Patterns, U.S. Census Bureau, 2006.
Top Five Automotive Cluster Counties by Employment
Rank County Employed Percent of Cluster 1 Sedgwick, KS 6,106 15.4%
2 Johnson, KS 6,055 15.3%
3 Wyandotte, KS 6,015 15.2%
4 Shawnee, KS 2,364 6.0%
5 Reno, KS 1,501 3.8%
Balance of Kansas Automotive Cluster 17,637 44.5%
Kansas Automotive Cluster 39,678 100.0% Source: County Business Patterns, U.S. Census Bureau, 2006.
2 The average annual wage for the automotive cluster is without that of the motor vehicle manufacturing sector due to suppressed data.
Kansas Automotive Manufacturing and Services 2008
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Em
plo
ym
ent an
d W
ages
Kansas Automotive Manufacturing and Services 2008
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*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.
Em
plo
ym
ent an
d W
ages
Kansas Automotive Manufacturing and Services 2008
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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 18,493 1.00 1,569 $642,460 $34,741
Automotive Repair and Maintenance 8,107 0.96 1,780 $216,990 $26,766
Motor Vehicle Manufacturing 3,750 1.86 3 N/A N/A
Motor Vehicle and Motor Vehicle Parts and Supplies Merchant Wholesalers 3,725 1.06 243 $141,389 $37,957
Motor Vehicle Parts Manufacturing 2,995 0.49 45 $96,188 $32,116
Motor Vehicle Body and Trailer Manufacturing 2,608 1.76 43 $93,525 $35,861
Automotive Cluster Total 39,678 0.01 3,683 $1,190,552 $30,005 Source: County Business Patterns, U.S. Census Bureau, 2006.
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, 2006
Source: County Business Patterns, U.S. Census Bureau, 2006.
9%
7%
8%
9%
47%
20%
Motor Vehicle Manufacturing
Motor Vehicle Body and Trailer Manufacturing
Motor Vehicle Parts Manufacturing
Motor Vehicle and Motor Vehicle Parts and Supplies Merchant Wholesalers
Motor Vehicle and Parts Dealers
Automotive Repair and Maintenance
Kansas Automotive Manufacturing and Services 2008
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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 Operations Managers
Bach + $69,243 640 733 214 183 31.1% 311 128 3.50
2. Sales Representatives, Wholesale and Manufacturing, Except Technical and Scientific Products
Moderate-term On-the-Job Training
$50,981 595 659 220 - - - - 3.00
3. First-Line Supervisors/Managers of Mechanics, Installers, and Repairers
Work Experience in a Related Occupation
$50,294 961 1,089 369 - - - - 3.00
4. Sales Managers Bach + $80,725 297 356 114 157 33.0% 170 13 2.75
5. Financial Managers Bach + $74,589 108 125 33 20 34.5% 50 29 2.75
Kansas Automotive Manufacturing and Services 2008
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Occupational Alignment, Kansas Automotive Cluster, Bachelor’s Degree ONLY
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. Accountants and Auditors Bachelor's $48,755 180 215 69 64 33.4% 104 40 2.50
2. Industrial Engineers Bachelor's $62,962 89 106 39 40 47.5% 74 34 2.50
3. Mechanical Engineers Bachelor's $67,891 71 90 38 39 47.5% 73 33 2.50
4. Credit Analysts Bachelor's $43,451 77 79 14 9 34.5% 21 13 2.25
5. Business Operations Specialists, All Other Bachelor's $51,688 65 82 28 18 34.5% 43 26 2.25
Occupational Alignment, Kansas Automotive Cluster, Technical Education or Associate’s Degree
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. Bus and Truck Mechanics and Diesel Engine Specialists
Postsecondary vocational training $34,258 539 597 197 261 25.5% 265 4 2.50
2.
Drafters, All Other
Postsecondary vocational training $44,013 58 68 24 3 62.7% 64 61 2.25
3. Industrial Engineering Technicians
Associate degree $42,286 35 47 19 16 18.6% 23 7 2.25
4. Automotive Service Technicians and Mechanics
Postsecondary vocational training $33,800 4,850 5,423 1,860 2,710 29.0% 2,620 - 2.00
5.
Mechanical Drafters
Postsecondary vocational training $39,000 22 25 9 1 62.7% 25 24 2.00
Kansas Automotive Manufacturing and Services 2008
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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, 2008. 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 industry-
specific 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
Additional Training Needs as Perceived by Industry Leaders
Clerical and Office Staff
13%
White-Collar Professionals
9%
Engineers, Designers, Others…
2%High-Skilled Blue-Collar
39%
Low- and Semi-Skilled Blue-Collar
37%
Automotive Industry Workers
3. Interpersonal Relationship Skills
4. Work Ethic/Responsibility
Thinking about your industry in the next 10-15 years, in what areas do
you think future employees will need additional training or
improvement?
1. Mechanical/Technical Skills
2. Computer Operation Skills
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Supply of Workers by Skill Level
Ease of Hiring by Skill Level
0 1 2 3 4 5 6 7 8
Clerical and Office Staff
White-Collar Professionals
Engineers, Designers, Others…
High-Skilled Blue-Collar
Low- and Semi-Skilled Blue-Collar
Number of Respondents
Job
Cat
ego
rie
sAutomotive - Supply of Workers
Abundant Supply
Adequate Supply
Small Shortage
Large Shortage
0 2 4 6 8 10 12 14
Clerical and Office Staff
White-Collar Professionals
Engineers, Designers, Others…
High-Skilled Blue-Collar
Low- and Semi-Skilled Blue-Collar
Number of Respondents
Job
Cat
ego
rie
s
Automotive -Ease in Hiring Good Workers Compared to 5 Years Ago
Easier
About the Same
More Difficult
Kansas Automotive Manufacturing and Services 2008
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Preparation of New Hires
Skill Sets Needed
Training Needs Public Education Might Address
0 2 4 6 8 10 12 14
Leaving High School
Leaving CC/Tech School
Leaving College
With Advanced Degree
Number of Respondents
Edu
cati
on
Le
vels
Automotive -Preparation of New Hires Coming to Work with...
Very Prepared
Somewhat Prepared
Not Prepared
2. Communications Skills
3. Mathematics Skills
4. Team Work Skills
5. Material Handling Skills 5. Work Ethic/Responsibility
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
1. Communications Skills 1. Management Skills
Thinking of skills or skill sets needed at the workplace, are there certain skills that ____________ seem to lack or that could be improved upon?
High School Graduates Community College or Technical School GraduatesFour Year, Advanced, and Specialized Degree
Holders
1. Work Ethic/Responsibility
1. Advanced Math Skills
2. Welding Skills
3. Knowledge of Specific Technologies
4. Work Ethics/Responsibility
When thinking about new AND current workers, do you have industry-
specific training needs that the public education system might
appropriately address?
Kansas Automotive Manufacturing and Services 2008
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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 2014. 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.