In Brief

A new book co-authored by a Federal Reserve Bank of Chicago economist looks closely at the structure and location of the auto industry's many vehicle-part suppliers and offers a fresh look at the industry's current and future operations.

Last Updated: 08/21/08

News Release

New Book Offers Fresh Look at Structure of Auto Industry

CHICAGO — A new book co-authored by a Federal Reserve Bank of Chicago economist looks closely at the structure and location of the auto industry's many vehicle-part suppliers and offers a fresh look at the industry's current and future operations.


"Who Really Made Your Car? Restructuring and Geographic Change in the Auto Industry," is written by Chicago Fed Senior Economist Thomas Klier, who has spent most of his career studying the industry. It is co-authored by James Rubenstein, a professor at Miami of Ohio University.


The findings in their book are based on a unique database of information they developed about the thousands of auto parts plants in North America. The book offers a comprehensive look at the industry's structure as well as challenges and changes that are resulting from the increasing numbers of parts suppliers as well as shifts in where they are located. Some of the book's key points:

 

  • About 70 percent of a new car is made up of components made by parts suppliers.
  • Employees in the parts industry outnumber final automaker assembly workers by nearly four-to-one.
  • Auto parts producers are becoming more likely to design and engineer parts as well as manufacture them.

 

The book presents key characteristics of the vast network of parts suppliers. It also describes the changing geography of U.S. motor vehicle production at the local, regional, national and international levels., Klier said.


"If a person dismantled a car, it would become obvious that its production required a complex supply chain, connecting thousands of parts and almost as many producers of parts," Klier said. "This book takes a detailed look at the companies making motor vehicle parts and the challenges they are facing."


For more information about the book or to arrange an interview with Klier, contact Laura LaBarbera at (312) 322-2387 or at laura.labarbera@chi.frb.org.

 

Federal Reserve Bank of Chicago Background

The Federal Reserve Bank of Chicago is one of 12 regional Reserve Banks that, along with the Board of Governors in Washington, DC, make up the nation's central bank. The Chicago Reserve Bank serves the 7th Federal Reserve District, which encompasses the northern portions of Illinois and Indiana, southern Wisconsin, the Lower Peninsula of Michigan, and the entire state of Iowa. In addition to participation in the formulation of monetary policy, each Reserve Bank supervises member banks and bank holding companies, provides financial services to depository institutions and the U.S. government, and monitors economic conditions in its District.