The Alliance of Automobile Manufacturers (Alliance) is a trade association of twelve car and light truck manufacturers including BMW Group, FCA US LLC, Ford Motor Company, General Motors Company, Jaguar Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche Cars, Toyota Motors, Volkswagen Group of America and Volvo Car USA.
These companies, along with their suppliers and dealers, generate billions of dollars for the US economy and support a total of 7.25 million American jobs in all 50 states, or about 3.8 percent of private-sector employment.
Alliance’s members rely heavily on the railroads and are amongst their largest customers. The ability to obtain reliable, cost-efficient freight rail service is critical to auto manufacturing in the United States and transporting finished automobiles to dealerships across the country.
What sort of issues are Alliance members experiencing?
Outdated policies and the lack of competitive rail options are having a detrimental impact on auto manufacturers and their operations in America.
In recent years, many auto manufacturers have been saddled with soaring rail rates combined with deteriorating service. Many Alliance members are confined to a single, Class 1 rail carrier and have little recourse when service or rates are unsatisfactory.
While railroads try to justify these rate increases by noting capital investments, automakers have not seen in an improvement in how the rail network operates for its customers. Railcar availability has diminished greatly in many markets, while service delays and second-rate railcars have become the new norm.
What’s at stake for the auto industry?
North America’s auto industry has undergone a dramatic transformation since the Great Recession of 2008-09, providing millions of jobs for American workers. Over the past two decades, the industry here in the U.S. expanded to include both foreign and domestic brands, as well as automobile assembly plants in 14 states.
This rapid growth presents its own set of challenges, and outdated freight rail policies only contribute to the challenges facing the industry. A lack of competition between railroads has allowed rates to soar, which threatens to derail the ability to maintain a smooth and efficient supply chain.
What needs to be done?
Automakers strongly urge President Trump to appoint members to the Surface Transportation Board (STB) who will advance fair freight rail reforms that improve the state of competition in the rail transportation industry. This will help to ensure that auto manufacturers have access to affordable and dependable freight rail transportation.
The industry looks forward to continuing our work with other rail customers to ensure the U.S. Senate will confirm qualified, pro-regulatory reform nominees.
THE RAIL CUSTOMER COALITION
The coalition is a large collection of trade associations representing a broad cross section of manufacturing, agricultural, and energy industries with operations and employees throughout the United States, including: