As part of its comprehensive efforts to advance tax reform and to support U.S. manufacturing jobs, the Motor & Equipment Manufacturers Association (MEMA) has written to Vice President Mike Pence and newly-confirmed Secretary of Commerce Wilbur Ross to set meetings to discuss issues of top importance to motor vehicle parts suppliers. On behalf of its members, MEMA has offered to work closely with the Trump administration to grow U.S manufacturing jobs and participate in discussions that directly impact the supplier industry, including trade, tax reform and regulatory reform.
“MEMA strongly supports the Administration’s vision of strengthening manufacturing jobs throughout the U.S. We stand ready to actively participate in discussions about trade, tax reform, and streamlining our regulatory system. Our industry’s participation in these discussions is critical,” MEMA President and CEO Steve Handschuh said in the letter to Vice President Pence.
The message also notes that the supplier industry manufactures and remanufactures parts, components, and systems for use in passenger cars and heavy duty vehicles and represents the largest manufacturing sector in the U.S., directly employing more than 871,000 Americans with over 88,000 of these workers in Indiana alone.
MEMA, its divisions, and many member companies also signed a letter welcoming Secretary Ross to his new position and commending him for recognizing the supplier industry’s contributions to U.S. manufacturing jobs during his confirmation hearings. Handschuh states in the letter, “As you recognized in your confirmation hearing, suppliers play a leading role in job creation and investment growth and contribute to the overall national economy. Our industry’s participation in discussions regarding free trade agreements is critical.”
MEMA and its four specialized divisions recently announced they are aligned with the goals of the Trump administration and Congress to strengthen America’s global manufacturing competitiveness and to create more American jobs. To reach these goals, MEMA supports a simplified, more predictable tax code that would generate investment, economic growth, and job creation in the United States.
Motor vehicle component manufacturers are the largest employer of manufacturing jobs in the U.S., contributing nearly 3 percent of the U.S. gross domestic product. Employment by suppliers is up 19 percent since 2012, generating a total direct and indirect employment impact of 4.26 million jobs. This job growth is made possible by a highly-integrated North American supply chain that supports both the automotive makers and the companies that supply motor vehicle parts. Many suppliers located in the U.S. import and export vehicle parts and components within the North American market. Depending on supply chain logistics, parts are often exported to be combined with other parts, then imported back to the U.S. for final vehicle assembly.
While MEMA supports tax reform, a border adjustment tax (BAT), which is a component of the current U.S. House Republican tax reform proposal, could disrupt the integrated supply chain for many companies and cause a ripple effect throughout the U.S. economy by 1) increasing costs for vehicle manufacturers, 2) decreasing available capital for new product development, 3) increasing consumer prices, 4) lowering sales, and 5) potentially decreasing manufacturing jobs in America.
In January, MEMA released an economic impact study that clearly defines the critical role motor vehicle parts suppliers play in the U.S. economy. The motor vehicle component manufacturing industry in the U.S. has experienced robust growth due to increased demand and vehicle sales. The stability and integration of the North American supply chain has been particularly beneficial to suppliers, contributing to growth in jobs and investments in the United States. MEMA supports reasonable tax reform that will allow this trend to continue.
