A new report issued by Oxford Economics in Great Britain shows that General Motors Co. in Detroit plays an “integral part” of the Michigan and U.S. economy.
Overall, the company supports 709,100 jobs in the United States, including 237,100 manufacturing jobs. Broken down further, 97,000 of those jobs are direct, with 288,100 induced. The report then applies a 7.3 job multiplier effect to come up with the figure of 709,100 jobs supported.
The report further declares that in 2022 alone, GM invested $5.6 billion in capital improvements, manufacturing production capacity, and the latest research and development.
“With a history stretching back more than 115 years, General Motors has deep-seated roots in Detroit with operations and a supply chain integrated into the United States and global economies,” the report states. “GM was the largest automotive manufacturer in the U.S. in 2022, and the US remains among the firm’s top target markets going forward.”
Overall, the company has a gross domestic product (GDP) impact of $116.5 billion on the U.S. economy. The direct impact is $39.2 billion, and the indirect impact is $44.1 billion. The induced impact is $33.2 billion. With a 2.97 multiplier used, that total impact figure is $116.5 billion.
Induced effects are defined as the increased sales within the region from household spending of the income earned in tourism and supporting industries. Indirect impact consists of activity that is supported because of procurement of goods and services by GM.
The multiplier effect is an economic term, referring to the proportional amount of increase, or decrease, in final income that results from an injection, or withdrawal, of capital.
The report further noted that in addition to the direct impacts, GM’s expenditure with its U.S.-based supply chain also generates an enormous amount of economic activity across all sectors and regions of the economy.
In 2022, the sum of these supply chain impacts totaled to approximately $44.1 billion. Extended further through the wage-induced spending channels of GM and its suppliers’ employees, the total impact of GM’s activities totals $116.5 billion.
GM’s total footprint is larger than the economies of 13 U.S. states, and approximately $10 billion larger than the value of America’s entire crop production in 2021. GM’s investment in its electric and internal combustion vehicle manufacturing capacity and supply chain will continue to bring broad economic benefits to the U.S. auto sector in years to come.
In 2022, GM invested almost $5.6 billion in capital improvements nationwide. The report estimates that this spending supported 39,240 jobs and nearly $4.9 billion in GDP that year. The long-term benefits of GM’s continued investments in the U.S. will continue to support American manufacturing jobs through the EV revolution in the auto sector.
Broken down further, the report also shows the economic impact GM has on Michigan’s economy. The total GDP impact is $49 billion, with a GDP multiplier effect of 2.0. A total of 264,740 jobs are supported in Michigan, with a job multiplier effect of 4.8.
GM invested $4.2 billion in Michigan in 2022, and the company was responsible for $8.2 billion in tax receipts for all levels of government.
It was stated in the report that with nearly $4.2 billion spent on capital improvements in the state in 2022, GM’s commitment to Michigan is expected to continue to have significant benefits well into the future. GM directly employed 55,450 individuals in Michigan in 2022, and when combined with jobs supported through the indirect and induced channels, supported 264,740 jobs in total — an implied statewide jobs multiplier of 4.8 and more than 5 percent of the state’s entire labor force.
The report concluded by stating that GM is among the largest manufacturing employers in the U.S., making the company an integral part of the national and local economies. The report also stated that GM is an industry leader in research and development in net zero emissions technology, and as a result can deliver technologically advanced products to customers. The technological advancements developed by GM also have the potential to be applied to industries beyond the automotive sector.
The report concluded that by paying high wages to its employees and investing in research and development while also making capital improvements to its infrastructure, GM has a major impact on the U.S. and Michigan economies. This includes economic activity, job creation, tax revenues, and the long-term U.S. productive potential.
To see the full report, visit here.
