New study: Kentucky’s automotive industry contributes $14.3 billion to state economy

Workers at Louisville's Integrated Manufacturing & Assembly plant.

Workers at Louisville’s Integrated Manufacturing & Assembly plant. | Photos by David Serchuk

Kentucky’s auto industry is a massive part of the commonwealth’s economic pie, with $1 out of every $13 generated by the state’s economy connected to it. It’s an industry with a reach that far exceeds OEM manufacturing, to include part makers, tool-and-die shops, and suppliers. It also has a presence in 80 of Kentucky’s 120 counties.

The industry’s total contribution to the state’s gross product is $14.3 billion.

An IMA worker steaming a Corvette seat.

An IMA worker steaming a Corvette seat.

This information comes from a new study, released today, from the Kentucky Automotive Industry Association (KAIA). The auto industry trade group commissioned the study, and the University of Louisville’s Urban Studies Institute conducted the research. The study measured the auto industry’s economic impact on the state, and it’s the first of its kind in Kentucky.

The study found Kentucky’s auto industry directly employs 85,552 workers at 470 businesses. These are largely good-paying jobs, with manufacturing workers earning an average salary of $58,280. Kentucky auto makers and suppliers pay $6.1 billion in payrolls annually.

Auto-related manufacturers and suppliers support 136,500 jobs in the state.

Kentucky’s auto industry also was responsible for $5.9 billion in exports in 2014, 20 percent of the state’s total.

Gov. Steve Beshear at IMA

Gov. Steve Beshear at IMA

The KAIA announced the results of the study at the Integrated Manufacturing & Assembly (IMA) plant in Louisville. The plant has 120 full-time workers, and makes seats for the Chevrolet Corvette, and seat assemblies for Mercedes.

The press conference was attended by Kentucky Governor Steve Beshear, Louisville Mayor Greg Fischer, Kentucky Cabinet for Economic Development Secretary Larry Hayes, and Jim Comer, CEO of IMA.

Gov. Beshear talked up Kentucky’s sometimes under-appreciated role as an auto-industry player. He pointed out Kentucky is the nation’s third largest maker of automobiles, light trucks, and SUVs, behind Michigan and Ohio.

He also noted the auto and auto-parts industries are growing rapidly. “While automotive jobs have declined by 26 percent nationally since 1990, Kentucky’s auto workforce … has grown by 72 percent,” he said. “And much of that growth has happened here in the past five years.”

Also, in the past five years, Kentucky auto industry employers have announced $5 billion in new investments, he said, and added 20,000 new jobs. “This study has made it clear that building cars has become one of Kentucky’s signature industries.”

Mayor Fischer noted that in 2014, Louisville had 80 auto-related businesses, which employed 56,000 people in the greater Louisville area. This totaled one out of 14 jobs in the Metro area, which includes outlying counties.