Annual Report 2017

Miles Ahead

Letter from the President

The auto industry is in the midst of a huge, largely self-directed, transformation.

From the automation and increased connectivity of light-duty vehicles, to advancements in electrification and emissions reductions, to the emergence of transportation as a service, this is not the auto industry of 20 years ago, or even two years ago.

While the benefits of trade liberalization are hotly debated on the world’s political stage, the globalization of auto production continues to accelerate. Each week brings news of new products and services that reimagine personal mobility and new alliances that reshape the industry. We all - consumers, workers, and taxpayers - benefit from safer, cleaner, and more efficient and accessible transportation. But, the incredible pace of innovation driving these changes could be threatened by a public policy framework built for an earlier time.

By thinking miles ahead, Global Automakers and its member companies have been able to anticipate these massive transformations. Just as automotive technology is evolving faster than the regulatory models that govern it, so too must our trade association. We must remain at the leading edge, building new relationships and employing new tools for delivering value to our members, to ensure that today’s policies don’t interfere with tomorrow’s innovations.

 

 

Moving Our Industry Forward

The American auto industry has reinvented itself in the span of less than a generation, thanks in large part to international automakers and nameplate dealers. Here are some facts that highlight the impact of our member companies:

Over the past 50 years, international automakers have become a significant and integral part of the U.S. economy.

The activity of international automakers in the U.S. generates 1.29 million direct and indirect American jobs.

The top five American-made vehicles, in terms of U.S. content, are manufactured by international automakers.

More than half of all U.S. new vehicle dealerships jobs are created by international nameplate dealers.

International automakers have invested more than $63 billion in U.S. operations since NAFTA took effect

Today’s modern U.S. auto industry is thriving.

CY2016 Data. Sources: The 2016 Global Automakers and AIADA Economic Impact Survey, AIADA’s membership roster, The University of Michigan Transportation Research Institute 1998 study prepared  for the Association of International Automobile Manufacturers (AIAM), NADA DATA, IHS Markit, and WardsAuto InfoBank. Direct employment multiplier of 9.9 derived by SCOUT Economics from IMPLAN U.S. input-output model for 2015.Vehicles are made, built, or manufactured in the United States using domestic and globally sourced parts.

Advancing Free Trade

2017 Highlights

Trade policy was one area where the Trump Administration quickly left its mark. The Administration targeted many of the trade agreements which had enabled the auto industry – and domestic and international economies – to flourish, cancelling the Trans-Pacific Partnership, beginning negotiations to modernize the North American Free Trade Agreement (NAFTA), and calling for the reopening of the Korea-U.S. Free Trade Agreement (KORUS). The new Administration clearly understands the economic and emotional significance of the American auto industry. However, there remain factions within the Administration who continue to view the U.S. auto industry through an outdated “foreign vs. domestic” lens. Global Automakers set out to remain a thoughtful, credible, and essential voice in trade policy debates.

Steering the Narrative

Building a Platform for Public Awareness

In 2015, Global Automakers recognized the need to close the knowledge gap even when the trade discussion was relatively quiet. Working with our members and with other international automakers (BMW, Daimler, Mazda, Mercedes-Benz Mitsubishi, Volkswagen, and Volvo) and dealers, we launched Here For America to educate the public about the growing importance of international automakers and dealers to American job creation, economic growth, technological innovation, and strong communities. 

Campaigning For Free Trade

During the presidential election, it became clear the long bipartisan consensus in favor of free trade was over. Campaign rhetoric explicitly promised renegotiation or even withdrawal from important free trade agreements that could have devastated well-established automotive supply chains, putting billions of dollars at stake. With no other associations focusing on our plight in a protectionist new Administration, Here For America went into advocacy mode.

Early in the new Administration, Global Automakers launched its first-ever TV advertising campaign under Here For America. Echoing the iconic 1984 Ronald Reagan presidential campaign ad, “Morning in America” featured the many faces of today’s hardworking men and women of the American auto industry. The integrated campaign targeted political media, members of Congress, Governors, and the Administration and quickly gained traction.

 

“The Here for America campaign has given us visibility on the role Toyota plays in the U.S. economy, employment and production…[and] has had a measurable impact on our image and business.”
Executive at Toyota Motor Corporation

Building Champions

The “Morning in America” campaign was covered in news outlets, including a live segment on a morning news show frequently viewed by the President, “Fox and Friends.” Governors in auto manufacturing states issued a number of supportive statements and letters that were useful in trade and tax policy discussions.

This campaign, as well as a sustained earned media effort, raised the Association profile, earning international automakers a seat at the table at critical meetings with senior administration officials and key White House staff.  

“Thank you for supporting the growth of the global automotive industry and for...raising awareness of these companies’ nationwide impact. I am grateful for the opportunity to work with these important partners to grow the state’s economy...and new jobs for Hoosiers.”
Eric J. Holcomb, Governor of Indiana

Creating Partnerships

Stop the BAT, Save Billions

The new Congressional tax plan proposed a 20 percent Border Adjustment Tax (BAT) that would have instantly driven up the price of imported vehicles for U.S. consumers by $34.6 billion. Global Automakers quickly brought together automakers and other impacted industry organizations into the “Smart Tax Policy” coalition, to deploy an aggressive government relations and communications campaign to defeat the BAT and other proposed taxes on global activities.

The coalition was successful in defeating or modifying harmful provisions while preserving the benefits of tax reform. 

“Foreign car makers are especially concerned about the House’s border adjustment, because they frequently have operations in the U.S. for which they import parts.”
Colin Wilhelm, Politico Pro

NAFTA is Driving American Jobs

Traditionally, domestic and international automakers have opposing views when it comes to U.S. trade policy. However, the industry as a whole has benefited from NAFTA which created competitive manufacturing conditions and significant consumer value. With the President’s decision to rewrite NAFTA, the entire industry organized to support maintaining the agreement competitive benefits.

In a matter of weeks, Global Automakers spearheaded the formation of "Driving American Jobs," an integrated campaign backed by a coalition of vehicle and component manufacturers and dealers, to gain support for a more balanced NAFTA 2.0. With extensive outreach in auto states and in Congress, the emotional campaign garnered bipartisan support of key Governors and Members of Congress, as well as the attention of all of the NAFTA negotiating partners. This positioned the Association as a credible, “go to” source for the media on NAFTA and trade issues. 

 

“A focus on bilateral trade balances or content requirements obscures a much larger and more important picture. In the case of the North American Free Trade Agreement, more than one million more vehicles were produced in the United States last year than in the year before NAFTA”
John Bozzella, President and CEO of Global Automakers.

MAPPING OUT A LOW CARBON FUTURE

2017 HIGHLIGHTS

Along with navigating macroeconomic conditions and international currents, automakers must also confront escalating regulatory requirements around the globe. The U.S. federal government, states, and municipalities, as well as other nations are seeking greater vehicle efficiencies and a transition away from carbon-based fuels. With our member companies, Global Automakers supports policy positions that strike the right balance between consumer preferences and a low-carbon future. 

Reducing Regulatory Friction

The 2016 election prompted the outgoing Administration to truncate its timetable for completing a midterm evaluation of GHG regulations for model years 2022 through 2025, issuing a final determination in the final weeks of President Obama‘s term. Global Automakers quickly and successfully petitioned the new Administration to return to a data-driven midterm evaluation that did not lock in a prejudged outcome. Fixing the midterm evaluation process was the first step in a longer journey of creating regulations that relieve the tension between consumer preferences, market realities, and strong and achievable standards.

“We need to give manufacturers the flexibility to each pursue the most effective ways to achieve aggressive targets and still meet the needs of their respective customers.”
Julia Rege, Director of Environment and Energy with the Association of Global Automakers

Building a Sustainable Electric Car Market

Automakers now offer cars and light trucks that are more fuel efficient and cleaner than ever before. Our members are investing heavily in plug-in hybrid, battery-electric and fuel-cell electric vehicles, yet these vehicles make up less than one and a half percent of total U.S. sales.

A zero emission vehicle (ZEV) sales mandate from California and nine other states requires automakers to sell more EVs each year through 2025. This requirement is challenging, as electric vehicles (EVs) make up less than one and a half percent of the total U.S. sales. With customers ultimately in the driver’s seat, there are several critical factors that impact their decision to buy an EV: consumer incentives; electric charging and/or hydrogen refueling station availability; fueling costs; ancillary benefits such as access to HOV lanes; consumer awareness; climate; geography; and vehicle utility needs. Addressing these challenges and assessing states’ progress toward the 2025 requirements is critical to developing EV markets that support increasing sales.

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“All of these initiatives represent bipartisan efforts to protect our environment and grow clean energy investment and jobs.”
Governor Larry Hogan, Maryland

Public-Private Partnerships Work

Global Automakers joined forces with the Northeast States for Clean Air Use Management and other industry organizations to create Drive Change. Drive Electric., a communications platform to advance consumer awareness, understanding, consideration, and adoption of electric cars in the northeast ZEV states. The groups worked together throughout 2017 to launch the campaign at the 2018 New York International Auto Show.  

#Spring is in the air! #ElectricCars emit 54% less lifetime carbon #pollution, so roll the window down, sing along to the radio & breathe easy. #DriveElectricUS https://bit.ly/2pROeM7
@DriveElectricUS

REIMAGINING MOBILITY

2017 HIGHLIGHTS

Advancements in vehicle-to-vehicle (V2V) technologies and automated vechicles (AVs) present significant opportunities to improve safety, mobility, and sustainability. The vast improvements in technology used in modern cars and light trucks – and their emergence as technology platforms in and of themselves – have brought automakers into a completely new policy world. Global Automakers has worked to encourage the establishment of a regulatory framework that fosters innovation and investment in these life-saving technologies.

Maintaining the Freedom to Innovate

With the rise of AVs, uncertainty around a range of public policy issues threatens to slow – or even kill – the technology. Global Automakers spent 2017 working with federal and state policymakers on a consistent national framework for AV technologies that promotes innovation and allows manufacturers to design and produce vehicles that can be sold and operated in all 50 states. Through our advocacy efforts, Congress and federal regulators now recognize the need for action. The Association supported legislation to create a pathway for deploying highly automated vehicles by providing clarity to federal and state authorities.

“Your team was among the most professional and most effective throughout the process on the self-driving legislation…I get to see a lot of different associations from my spot and you all are at the top.”
Counsel, Committee on Energy and Commerce

Connecting Vehicles, Connecting Motorists

In January 2017, the Obama Administration finally issued its long-delayed proposed rule (NPRM) requiring Dedicated Short Range Communications (DSRC) on all new vehicles in the next 5 to 7 years. However, uncertainty remains around the industry’s long-term ability to maintain full use of the 5.9 GHz spectrum – known as the Safety Spectrum – for DSRC communications.  

With the current Administration’s deregulatory disposition, no final federal motor vehicle standard mandating V2V has been issued. Federal Communication Commission (FCC) rulemaking proceedings slowed on the potential sharing of the Safety Spectrum with unlicensed Wi-Fi users.

Despite the lack of regulatory movement, our efforts to protect the Safety Spectrum from harmful interference continued. Our Safety Spectrum Coalition, a group of automakers, highway safety advocates, and intelligent transportation organizations, launched its second digital ad campaign to reinforce the need to "Save the Safety Spectrum" with key audiences at the White House, the FCC, NHTSA, and the DOT. This campaign flight drove almost 400,000 video views and more than 800,000 impressions.  

 

“Global Automakers provides information and strategic insight on government and trade policies, regulatory developments and industry trends in a forum where we are able to sit side by side with our automobile manufacturer partners to develop approaches and solutions that help move us forward”
Terry Helgesen-Senior Vice President, Industry and Government Affairs-Denso International America, Inc.

CONNECTING IDEAS

As automotive technology evolves more quickly than ever, the way we engage with our members, policymakers, and the public must also keep pace. In 2017, we continued to increase our following on social media, expand our reach, and grow our impact.