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Federal Register / Vol. 86, No. 213 / Monday, November 8, 2021 / Notices
decisions.213 Other factors included the size of the countrys economy and economic growth potential.
R&D decisions are also increasingly driven by government-based initiatives to attract investment away from other automobile-producing nations. For example, the Chinese Government has increased automotive R&D in the domestic market through various incentives and restrictive investment requirements. In 2006, the Government set aside $184 million for automotive R&D support under its National High Tech R&D Program, a program designed to accelerate R&D across a range of sectors.214 Under Chinas 13th Five-Year Plan 20162020, 20 New Energy Vehicle NEV projects were allotted around $111 million pursuant to the National Key Research and Development Program of China, a program focused on rapidly developing new energy technologies.215
Other traditionally low-cost countries with growing domestic markets, or within close proximity to growing markets, have also invested heavily in attracting automotive R&D. Hungary cut its corporate tax rate to 9 percentthe lowest in the EUand introduced special tax incentives for companies with R&D investments.216 Hungary recently invested $15 million in a test track for traditional and autonomous vehicles that it intends will become a magnet for future investment in automobile development and testing.
Brazil is implementing a 14-year incentive program that will offer up to BR1.5 billion $467.4 million in annual tax credits for automobile producers and automobile parts manufacturers that reach certain R&D investment targets.217
225 U.S.

Producers Survey Responses, Question 8.
of Labor Statistics, Total Employment for Motor Vehicles and Motor Vehicle Parts, supra.;
Department of Commerce, Census Bureau.
227 Bureau of Economic Analysis, Foreign Direct Investment in the United States, Data on Activities of Multinational Enterprises; Bureau of Labor Statistics, Current Employment Statistics.
228 U.S. automotive employmentand consequently job losseshas been spread across the United States. While Michigan continues to have the largest share at 172,000 workers, many other states are significant employers as well. Indiana currently employs 111,500 automotive workers, Ohio employs 95,300 workers, Kentucky employs
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Heavy investment in attracting R&D in new automotive technologies is also a strategy for mature automobile producing countries. In order to target new technologies and manufacturing, the South Korean Government recently agreed to invest about 2 billion Euros into hydrogen mobility including fuel cells over the next five years. Facilities manufacturing fuel cell vehicles and those performing related R&D will receive funding in order to reach the Governments ambitious production target of 15,000 fuel cell vehicles by 2022.218 Additionally, fearing that the EU automobile industry could be left behind in the race to build mass market electric vehicles because of their reliance on batteries from Asia, the EU
recently announced that it will offer billions of Euros of funding to companies willing to build giant battery factories in the region.219 Individual EU
countries will fund 100 percent of research.220
Government efforts worldwide to divert automotive R&D and related manufacturing abroad is particularly dangerous for the American-owned automotive industry. Data show that, across all industries, the United States heavily outsources R&D to other nations and that the automotive industry is a large driver of this R&D offshoring trend.221 The offshoring of R&D
2018, https www.wardsauto.com/industry/
brazilian-auto-industry-awaits-word-incentives.
218 South Korea to Invest 2BN into Fuel Cell Vehicles, electrive.com, Jun. 25, 2018, https
www.electrive.com/2018/06/25/south-korea-toinvest-e2bn-into-fuel-cell-vehicles/.
219 Rochelle Toplensky, EU to Offer Billions of Funding for Electric Vehicle Plants, Financial Times, Oct. 14, 2018, https www.ft.com/content/
097ff758-cec3-11e8-a9f2-7574db66bcd5?
desktop=true.
220 Id. The EUs Horizon 2020 research fund has set aside 200m for battery projects; 800m is available to finance building demonstration facilities; regions looking to promote the industry can apply for the 22bn regional funds available;
and the European Fund for Strategic Investment is available from the European Investment Bank to cofund the billions of euros needed to build an EU
equivalent of Teslas gigafactory in the Nevada desert.
221 J. John Wu, Why U.S. Business R&D Is Not as Strong as It Appears, Information Technology &
Innovation Foundation, June 2018. http
www2.itif.org/2018-us-business-rd.pdf at 10, 13, 14.

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activities coupled with manufacturing jeopardizes the ability of the U.S.
automotive industry, and specifically American-owned manufacturers, to develop innovative products and deliver high-tech products and skilled workers to the industrial base, threatening technological advancements necessary for defense capabilities. Further, the offshoring of R&D and manufacturing will increasingly render the United States reliant on imported products.
Conditions of competition must be improved so that American-owned automobile producers and automobile parts manufacturers are able to increase production in the United States, and thereby augment R&D levels to develop and capitalize on the latest technologies domestically.
D. Decline in Employment in the U.S.
Automotive Industry The deterioration in the competitive position of the U.S. automobile and automobile parts manufacturing industry outlined above is further evidenced by the decline in U.S.
automotive industry employment, and in particular employment by Americanowned firms. The U.S. automobile and automobile parts industry Americanowned and foreign-owned firms employs approximately 798,300
workers, or approximately 6 percent of the nations manufacturing workforce.222 This is a significant drop from the recent peak in 2000, when the industry accounted for 291,400
automobile assembly jobs and 839,500
automobile parts manufacturing jobs.223
The decline amounts to a loss of 332,600 manufacturing jobs, which is equivalent to approximately 7 percent of the loss in all manufacturing jobs between 2000 and 2017.224 Americanowned automobile manufacturing plants account for TEXT REDACTED of the overall workforce across all U.S. basedautomobile plants.225
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222 Bureau of Labor Statistics, Total Employment for Motor Vehicles and Motor Vehicle Parts, supra.
223 Id.
224 Id.

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