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TABLE 3-4 Rising Sophistication of Technical Work in India

 

2001

2002

2003

2004

2005

2006 (E)

Computer-aided design (CAD) and computer-aided manufacturing (CAM) (CAD/CAM) ($B)

3.65

4.40

4.87

5.98

7.67

10.16

Total software exports ($billions)

5.30

6.16

7.10

9.80

13.10

17.10

Share of CAD/CAM (%)

68.90

71.40

68.60

61.00

58.50

59.60

Share of foreign firms’ revenue (%)

14.50

22.00

26.00

31.00

31.00

n/a

Source: Dossani and Kenney, this volume.

AUTOMOTIVE INDUSTRY

The paper by John Moavenzadeh, executive director of the International Motor Vehicle Program, on engineering work in the automotive industry begins with a description of the two main categories of engineers—manufacturing engineers and product engineers (the majority). Manufacturing engineers typically work at production facilities, while product engineers typically work at corporate engineering and design facilities. Product engineering can be divided into several categories: product design, development, testing, and advanced engineering. A significant percentage of product engineers work for automotive suppliers rather than for original equipment manufacturers (OEMs), such as Ford, Toyota, and Volkswagen.

Moavenzadeh describes the difficulty of estimating the size of the automotive engineering workforce in the United States based on official statistics, which are not specific to the engineering categories in the industry. By inference and extrapolation, he estimates that at least 160,000 engineers and technicians support OEMs and suppliers in the U.S. automotive industry (Tables 3-5a,b).

The automotive industry ranks second among U.S. industries in terms of overall spending on R&D. Six of the top 20 companies that spend the most on global R&D are automotive OEMs. Engineering and product-development productivity levels differ for OEMs based in different parts of the world; Japanese OEMs are more productive, for example, than OEMs based in the United States and Europe.

From its beginnings in the late nineteenth and early twentieth centuries, the automotive industry has been international. In the first half of the twentieth century, for example, Ford and General Motors both had a large number of overseas assembly plants. Over time, in some of the larger markets, subsidiaries, which operated almost as separate companies, were established to design and build cars specifically for those markets.

Since the 1960s, the auto industry has “undergone a second wave of globalization,” fueled by changes in the U.S. market, which is still the largest and most open market in the world (Moavenzadeh, this volume). One of those changes was the growth of the Japanese auto industry. At first Japanese companies in the United States relied exclusively on exports from Japan. Gradually, however, they built manufacturing and then engineering capabilities in the United States and Europe. These so-called “transplants” now account for more than 30 percent of U.S. auto production.

Today more than half of General Motors employees are outside the United States, and companies such as Volkswagen, Hyundai-Kia, and Honda assemble more than half of their vehicles outside their home countries. The supplier base is similarly distributed, especially tier-one suppliers, which provide interiors and other components that require R&D and production closely coordinated with OEMs.

Automotive manufacturers manage their production and engineering “footprint” based on a number of factors, including customers (i.e., the location of the market); capability (i.e., the best way to leverage available talent); cost (i.e., labor costs and integration costs at various locations); and government (i.e., trade and investment policies).

The most important factor, though, is market growth (Moavenzadeh, this volume). The United States, Japan, and Europe have large, but already mature markets that are not growing very rapidly, whereas large developing economies

TABLE 3-5a BLS Data Showing Automotive Engineers in the United Statesa

Occupational Code

NAICS 3361: Motor Vehicle Manufacturing

NAICS: Motor Vehicle Body and Trailer Manufacturing

NAICS 3363: Motor Vehicle Parts Manufacturing

Total of All Three NAICS Codes

Engineering managers

610

570

3,960

5,140

Industrial engineers

3,390

1,240

14,460

19,090

Mechanical engineers

1,920

1,360

9,300

12,580

Electrical engineers

150

110

910

1,170

Engineers, all other

n/a

180

7,200

7,380

Total

6,070

3,460

35,830

45,360

All Occupations

256,700

168,840

693,120

1,118,600

aDoes not include most product engineers.



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