June 9, 2015 – Automotive industry strong in Kentucky – A legislative perspective on the Kentucky General Assembly with State Representative Rick Rand

rand020515FRANKFORT – In 1913, when the automotive industry first set up shop in Kentucky, few then could have imagined just how much of an impact it would have on the commonwealth in the decades ahead.

It all began on South Third Street in Louisville, where 17 employees could assemble up to 12 of Ford’s Model T vehicles on a good day.

Now, we churn out more than 3,500 a day on average at our four assembly plants, or about 1.3 million a year. That’s a traffic jam stretching from Seattle to Miami.
About one in every 18 jobs in the state, meanwhile, is tied in some way to the auto industry or the economic impact it provides.

Those facts and many more can be found in a six-month study that Governor Beshear made public last week and that was written by the University of Louisville’s Urban Studies Institute.

In short, Kentucky has arguably benefited more than any other state in the industry’s shift to the South over the last quarter-century.

Consider that, since 1990, our automotive employment has grown by 72 percent while it has declined by a fourth nationally. We’re third nationally in light-vehicle production – behind Michigan and Ohio – but first in producing some of the most popular vehicles in their class. Those range from F-Series trucks to the Camry and Corvette. Vehicle exports have nearly tripled over the last six years.

Our auto-parts factories play a dominant role as well in the industry. There are more than 460 factories across the state, with two-thirds of our 120 counties having at least one.

The good news is that the good news keeps on coming. The industry has announced between 60 and 70 expansion or re-location projects every year for the past five years. If they meet their projections, these projects will account for $4.5 billion in investment and 20,000 new jobs. All but 10 percent of this investment comes from companies expanding their presence here, a strong indication that they are pleased with what we have to offer.

There are several key reasons for our success. Our workforce and job-training programs are key, and there is no doubt that geography helps as well. No other state is closer to the 29 auto assembly plants in our region.

Inexpensive electricity costs play in our favor as well, with only three states having a lower industrial rate than Kentucky.

Being a major player in the aluminum industry – we’re responsible for a fourth of the country’s primary production – bodes well for our future as auto manufacturers look for ways to safely reduce vehicle weight to increase fuel efficiency.

Ford recently unveiled the country’s first mass-produced aluminum-body truck, but by 2025, industry experts believe that three out of four trucks and one in five SUVs will be made this way. As a result, hundreds of millions of dollars are being invested here to meet that increased demand for aluminum.

Now that this study is complete, the state is readying to move forward with a second one that will highlight another fast-growing sector of our economy: aerospace and aviation. They generate more than $5 billion in exports a year, making them bigger than the auto industry in this area, but the full scope of their presence is not fully known. Under legislation the General Assembly approved earlier this year, an array of state agencies will now work cooperatively to give us a much clearer picture in the months ahead.

For now, if you would like to let me know your thoughts on this matter or any other involving the state, please let me know. You can write to me at Room 366B, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601; or you can email me atRick.Rand@lrc.ky.gov.

To leave a message for me or for any legislator by phone, please call 800-372-7181. For those with a hearing impairment, the number is 800-896-0305.

I hope to hear from you soon.

Paid for by Rick Rand for State Representative, Regina Rand, Treasurer