Things that Go: Transportation Manufacturing in Oregon

by Henry Fields

March 7, 2018

Consider the following: Detroit is the Motor City, synonymous in every way with car production. Before Amazon defined Seattle’s image, it was seen as a Boeing company town. Brooklyn’s navy yard, even though it was decommissioned in 1966, keeps its name and historical tradition alive in a new form as a mission-driven industrial park.

What do these observations about local economies and the industries that define them have in common? They’re all based on the transportation equipment manufacturing industry, a unique sector that produces all the “things that go” in our world.

Although Oregon is not immediately associated with the transportation sector, the above examples show that there’s an undeniable connection between the perception of a region and the vehicles it produces. So when it comes to making things that go, what products start their journey in Oregon?

Planes, Trains, and Automobiles (Boats and Bicycles too)

Transportation equipment manufacturing is an odd subsector of manufacturing because it is defined by what its products will go on to do. Whereas industries like chemical, wood products, or electronics manufacturing are defined by material inputs or production processes, transportation equipment manufacturing is united by one thing: what comes out will move humans or their things around.

The industry is made up of a wide range of businesses types. The major subsectors (in Oregon at least) are:

  • Motor vehicle bodies and trailers: producing the bodies for cars, trucks, motor homes, or trailers.
  • Motor vehicle parts: anything that goes inside or makes up an element of a finished car, truck, or the like.
  • Aerospace: vehicles or parts for aircraft, spacecraft, or missiles.
  • Ships and boats: crafts for water transport. Boats are suitable for personal and recreational use, ships are for commercial, industrial, or military use (such as passenger ships, barges, or submarines).
  • All other: producing anything else used for transportation, such as bicycles, motorcycles, or ATVs. Since Oregon does not have a substantial number of companies in motor vehicle or railroad stock production, these are included here, although in many other states they would be considered a standalone part of the industry.
As you might expect for a sector that encompasses cruise ships and bicycles, each of its parts has different economic prospects and areas of strength throughout the state. RV and camper production (more on that in a second) has a significant presence in Lane County and Eastern Oregon. Southern Oregon and Douglas County have a strong history of boat building whereas shipbuilding is concentrated in shipyards near ports on the coast and along the Columbia River.

Pockets of strength in vehicle parts, aerospace and other transportation sectors lie throughout the state, often building on regional advantages like Portland’s innovation ecosystem or infrastructure such as regional airports. Future-oriented companies producing products like electric vehicles and drones continue to develop across the state as well.

Recent Historical Trends

Like many types of manufacturing, transportation equipment took a big hit in the last recession. The national auto industry bailouts of 2008-09 were the result of rapid decline in demand for motor vehicles that devastated the industry. Although not affected to the same degree as Detroit, the Oregon transportation equipment manufacturing industry was not immune from these same shocks.

Similar to manufacturing overall, the sector has made progress since the recession, but employment remains well below what it was before 2008. From its low point of 9,970 employed in 2009, the number of jobs increased to 12,114 in 2016. In 2006, the industry employed 18,292.
Oregon has historically had some additional pain points in the sector. Oregon tends to specialize in some transportation equipment that is even more responsive to consumer demands and income than cars and trucks. Luxury goods like the high-end RVs that were produced at Monaco and Country Coach in Lane County are very “demand elastic,” meaning that when consumer income dropped as a result of the economic downturn, demand for these non-necessity goods dropped substantially. Both Monaco and Country Coach would eventually cease operations in Lane County.

In this graph, you can see the trend in employment in each industry of transportation equipment manufacturing. Neither aerospace nor ships and boats saw much of a decline and have grown since 2001. The “other” category has declined precipitously; most of this captures the dramatic decline in the RV industry. Many of the major RV employers in Oregon that suffered during the recession built large motor homes on bus chassis and were thus classified under heavy duty truck manufacturing, here grouped with “other.” Since 2001, the number of jobs in motor vehicle parts has declined substantially (a 34% decrease) and vehicle body and trailers less so (a 3% decrease).

Occupations in the Industry

Most of the largest occupations in transportation equipment manufacturing are production workers like welders, assemblers, and machinists. There are also prominent career opportunities in quality control, administration, sales and management.

Further down the occupation list are smaller skilled occupations tailored to the industry, such as fiberglass laminators who work on vehicle and boat bodies or mechanical drafters and industrial engineers who specialize in creating and utilizing custom blueprints. As in most advanced manufacturing industries, there are specialized needs for logisticians and industrial production managers to keep business running smoothly.

Industry Outlook – Stuck in Neutral?

While things have certainly improved since 2009, the transportation equipment manufacturing industry has ground left to cover. The number employed in the industry has been fairly flat in recent years, declining slightly from a recent peak in mid-2015. Even at its highest point since the recession, the numbers employed were still about two-thirds of the total in 2006.

The good news is that while there was some substantial economic disruption over the past ten years, the sector is diverse enough that some areas can continue to grow even while others struggle.

Regional success stories continue to emerge. Employment in RV production is slowly creeping back in Lane County, which offers opportunities to workers who never left but took lower-paying jobs in other industries to stay in the area. As a technologically advanced field, growth in disruptive transportation technologies might offer an upside to growth of the industry.

The nature of the things that go in our lives will always be changing, but through the industry’s ups and downs, those in transportation equipment manufacturing can take comfort in one fundamental truth. As long as humans need to get around, there will always be demand for the machines that help us do so.

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