REPORT2025TURBOCHARGING USAUTOMOTIVEMANUFACTURINGCOMPETITIVENESSStrateqicleverstotransformsuppliercapabilitiesARTHURPLITTLEmema.The VehicleSupplersAssociation
CONTENTFOREWORD1THEEVOLUTIONOFUSMANUFACTURING42.CONSTRAINTS&OPPORTUNITIESBYCOMMODITYGROUP103.DRIVINGFORCESINMODERNUSAUTOMOTIVEMANUFACTURING34RECOMMENDATIONS&CONCLUSION48JORNBUSSANDREWHOLLIDAYLISASTERNIKPartner&HeadofAmericas,ConsultantAutomotive&ManufacturingAtlantaNewYorkGroup(AMG)DetroitTAMARACONWAYTHOMASCHOWPrincipal,AMGConsultantFRANKMCCLEARYChicagoSanFranciscoPartner,AMGAtlantaANDYTSUNOBusinessAnalystNewYorkort was jointly prepared with MEMA Original Equipment Suppliers on terms specifically limitingtSuppliersse of this reportbyany third partyfor anyurposedoesnot absolvesuch third partyfrom conducting their own due diligence.Any relianceonnstbilityof theuser.NeitherArthurD.LittenorMEMAOriainal
FOREWORDDearreaderUSmanufacturinghasenteredaperiodofunprecedented recalibration, shaped not by choice but by necessity. Technologyshifts,pandemic-inducedshocks, and geopolitical tensions haveclearlydemonstrated that the US must reimagine industrial selfreliance ifit aims to secure competitiveness and reliable accessto system-critical products Weseesigns of accelerated movements across the automotive supplythe US government enacted several major initiatives, and OEMs arereinvesting in US production footprints. Yet much of this activity isconcentrated inTier1segments,leavingTier2andTier3suppliersSeeingsuppliersstruggleinthisVUCA(volatile,uncertaincomplex,ambiquous)landscaoe,ArthurD.Little(ADL)andMEMAOriainal Eauioment Suppliersworked toaether toexamine thedrastic changes that broughtus to thispointand provide specificdirectivesforsuppliers.OEMs,andoolicymakersThislandmarkstudy ffersanin-depth view of what a potentaltransformationentails.Bvanalvzina the viabilitv of US-basedproductionbycommodity,(labormarketdvnamics,automationbottlenecks, and more, we highlight where the real levers lieand where actionismost uraentlvneededJornBussFrankMcClearyPartnerPartnerArthurD.LittleArthur D.LittleCollinShawPresidentMEMAOriginalEquipmentSuppliers,
REPORT:TURBOCHARGINGUSAUTOMOTIVEMANUFACTURINGCOMPETITIVENESS1.THEEVOLUTION OFUSMANUFACTURINGPOST-WORLDWAR IIGRADUALDECLINEMANUFACTURINGADVANTAGEBy themid-19709s thesingular US advantage In the decades after1945, the US was the onlis Europe rebuiltits industrialase and converaencedynamics took hold. Japanadvanced economy with an intact industrial baseDomesticdemandsurgedfrompent-upneedsity management, andToyotaProductionSystemsfor efficiencyandconsumer market. Fiscal and industrial policfollowed abroadlyKeynesiantemolatewhichve OEMs leveragedoricecontrolsaerospacn partsofindustry.?economy, this action|inflationundercontrololate1970s and1980smarkedwayfrom post-war industrialeemerqingconcept ofn and Thatcher revolutions, economicfootprints extending into Mexico and Canadincreasingly favored derequlation.as cross-border networks maturedtaxreduction, and financializationoverdirect
The 1981EconomilcRecoveryTaxAct(ERTA)ACCELERATEDDECLINElowered the top marginal income taxratefrom70%to50%, but muchof then...
