Auto Industry Embarking On Hiring Binge
Engineers, welders, technicians are among the high-quality jobs to be filled.
The new employees will be part of a larger, busier workforce. Factories today are operating at about 95 percent of capacity, and many are already running three shifts, which means they are running all out. As a result, some auto and parts companies are doing something they've been reluctant to consider since the recession: Adding floor space and spending millions of dollars on new equipment.
"We're really bumping up against the edge," says Michael Robinet, managing director of IHS Automotive, which forecasts auto production. "So it really is brick-and-mortar time."
The auto industry's stepped-up hiring will help sustain the nation's job growth and help fuel consumer spending. On Friday, the government said U.S. employers added 175,000 jobs in May, roughly the monthly average for the past year and a sign of the economy's resilience. At 7.6 percent, U.S. unemployment remains stubbornly above the 5 percent to 6 percent typical of a healthy economy. Economic growth is still modest, but mostly because of government spending cuts that kicked in this year and weak overseas economies. But the housing market is strengthening, and U.S. consumer confidence has reached a five-year high.
Even before the workers being sought today for the next generation of automobiles are secured, this generation is doing quite well as consumers replace aging vehicles. Vehicle sales for 2013 could reach 15.5 million, the highest in six years. To meet that demand, automakers must find more people. Hundreds of companies that make parts for automakers have to hire, too, just to keep up.
"As volume goes up, we will really need to add heads," says Mel Stephens, a spokesman for Lear Corp., which makes automotive seats.
From January through May, automakers and parts companies hired 8,000 workers, a relatively slow rate. But the pace is picking up. The Center for Automotive Research expects the industry to add 35,000 over the full year.
The hiring plans are widespread. Chrysler Group LLC, Honda Motor Co., General Motors Co., Mercedes-Benz and Ford Motor Co. plan to add more than 13,000 people this year alone.
Large parts companies such as Lear, BorgWarner Inc. and TRW Automotive Holdings Corp. are hiring at factories and research centers. Smaller suppliers, which supply those parts companies are adding jobs as well. It is that ripple effect that President Obama cited when he approved the bailouts of Chrysler and General Motors in 2009.
The auto business has helped keep the economy afloat while Americans wait for the rest of the business world to start hiring. Since 2009, 1 in every 4 manufacturing jobs added in the U.S. came in the auto industry, says Daniel Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation, a manufacturing trade group. The auto industry is just under 7 percent of U.S. manufacturing jobs.
Car companies and parts makers created 167,500 jobs from the end of the recession in June 2009 through May. At the same time, U.S. auto sales rose from a low point of 10.4 million in 2009 to an annual rate of more than 15 million so far this year.
Chrysler's comeback, for example, gave Jeff Caldwell the confidence to leave a human resources consulting firm. Caldwell joined the company in February as an assembly line supervisor at a Jeep Grand Cherokee factory in Detroit. He supervises 100 workers who build the SUV's chassis.
"I knew Chrysler was moving in the right direction," says Caldwell, 29, who was born in Detroit and always had an interest in cars. "They kind of reinvented themselves, and I really wanted to get in while I could."
Among the hiring planned for this year:
- Chrysler will add more than 3,500 workers this year at factories in Indiana, Ohio and Michigan to make transmissions and to build Jeeps and Ram pickups.
- Ford expects to hire 2,200 salaried workers in information technology, product development and manufacturing. Plus the company is hiring 1,400 factory workers and recalling another 2,000 laid-off employees, in Michigan and Missouri.
- GM is hiring 4,000 engineers and computer professionals at four technical centers in Arizona, Georgia, Michigan and Texas to develop software and other innovations.
- Honda is adding at least 500 jobs this year at factories in Ohio, Indiana and Alabama as it moves more production to North America.
- At TRW Automotive, recruiters are looking for 50 engineers in the Detroit area to work on new safety features such as a system that warns drivers when large animals are in their path.
Smaller companies also are joining in. Automotive business at Waukesha Metal Products in Sussex, Wis., is so strong that the company is near its capacity to make metal parts for axles, drive shafts and interiors. It's adding $1 million worth of equipment near Milwaukee and building a plant in Mexico to be closer to companies it supplies.
Most industry analysts predict that U.S. auto sales will rise gradually during the next five years. Estimates for this year range from 15 million to 15.5 million, compared with 14.5 million a year ago. LMC Automotive, a Troy, Mich., forecasting firm, predicts that sales will gradually increase to 17 million in 2017. That level would be almost equal to the boom years of the late 1990s and early 2000s.
Analysts say sales will climb as more people reach driving age. Also, many consumers and businesses still have cars and trucks they bought last decade, if not earlier. The average vehicle on U.S. roads is now a record 11.2 years.
For engineers and many white-collar jobs, auto companies pay salaries that are competitive with the rest of the country. But wages and benefits in the factories have declined.
Most new hires will start around $16 per hour, a little over half the pay that longtime workers get. The lower wage was a concession made by the United Auto Workers union to cut costs as the companies ran into financial trouble six years ago. New hires receive health care but get 401K plans instead of pensions, and they don't get health care in retirement like longtime workers do. Still, their wages are better than most other factory workers, who make $13 to $14 per hour in the U.S. A 17-year veteran of auto plants makes about $29 per hour today.
The recent hiring binge is even causing worker shortages in some areas. Skilled workers such as engineers, machinists, software developers and welders are hard to find, especially in the Detroit area. Entry-level factory jobs, which start around $15 per hour, are filled quickly.
"We're having some pretty good success finding people," said Ken Kaiser, vice president of engineering for TRW Automotive. "But we'd like to find more, faster."
AOL Autos contributed to this report.
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