American auto industry about to go on hiring spree

American auto industry about to go on hiring spree, plans expansion to meet rising demand

Associated Press
American auto industry about to go on hiring spree
.

View photo

In this Wednesday, May 8, 2013, photo, Jeff Caldwell, 29, right, a chassis assembly line supervisor, checks a vehicle on the assembly line at the Chrysler Jefferson North Assembly plant in Detroit. The auto industry is on a hiring spree as car makers and parts suppliers race to find engineers, technicians and factory workers to build the next generation of vehicles.(AP Photo/Paul Sancya)

DETROIT (AP) -- The auto industry is about to go on a hiring spree as car makers and parts suppliers race to find engineers, technicians and factory workers to build the next generation of vehicles.

The new employees will be part of a larger, busier workforce. From coast to coast, the industry is in top gear. Factories are operating at about 95 percent of capacity, and many are already running three shifts. 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 well above the 5 percent to 6 percent typical of a healthy economy. Growth is still modest, in part because of higher taxes and 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.

The auto industry's outlook is bright. 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.

Large parts companies such as Lear, BorgWarner Inc. and TRW Automotive Holdings Corp. are hiring at factories and research centers. Smaller suppliers are adding jobs as well.

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 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.

The improving economy also helps lift sales. As the housing and construction sectors have come back to life, pickup sales have risen faster than the rest of the market. That has meant a job for Curtis Enkey of suburban Kansas City.

Enkey was laid off in April of last year when Ford moved production of the Escape SUV from his factory near Kansas City to Louisville, Ky. He wasn't supposed to come back until Ford started making a commercial van at his plant in July or August. But higher sales of the F-150 pickup, which also is made at his factory, brought an early call to return.

Now Enkey is happily working 50-hour weeks. A Ford worker since 1995, he makes about $29 per hour plus benefits.

Even with the added hiring, the auto industry isn't the job creator it once was. In 2005, before huge cuts began, more than 1.1 million people made motor vehicles and parts. Today, 798,000 do, according to the latest government statistics.

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.

The industry would be adding even more workers if not for productivity gains made since the boom years, says Kristin Dziczek, head of the labor and industry group at the Center for Automotive Research.

In 2004, the nation had 70 auto-assembly plants. Now there are only 55. But the industry will make 10.7 million vehicles in those plants this year, only 850,000 fewer than in 2004, according to Ward's Automotive.

Executives are being forced to rethink hard lines they've drawn against adding space — and costs — since they closed factories during the economic downturn.

For instance, General Motors is building a 500,000-square-foot addition to its plant in Wentzville, Mo., to handle expected sales of the next generation of midsize pickup trucks due out next year.

But at Ford, executives want to keep costs down by squeezing as many cars and trucks as possible out of existing factory space, mostly by increasing line speeds and breaking up equipment bottlenecks.

"We are running a number of our plants pretty full," says Joe Hinrichs, the company's president of the Americas. "But we have more upside if we need it."

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."

___

Associated Press Economics Writer Christopher S. Rugaber in Washington and Auto Writer Dee-Ann Durbin in Detroit contributed to this report.

Rates

View Comments (291)

Recommended for You

  • Tycoon buys 30 Rolls-Royces for Macau hotel

    A Hong Kong tycoon has placed the biggest ever order for Rolls-Royce cars, agreeing to buy 30 Phantoms to chauffeur guests at a luxury resort he's building in the global gambling capital of Macau. Stephen Hung's $20 million purchase surpasses the 14 Phantoms bought by Hong Kong's Peninsula Hotel in…

    Associated Press
  • Want an Android Tablet?

    Get the hottest new Android tablets for less. Save big on HTC, Motorola, Samsung and more. Compare the latest prices and save big now at Nextag!

    AdChoicesNextagSponsored
  • Before You Buy Alibaba, Check Out 4 Top China Stocks

    Before You Buy Alibaba, Check Out 4 Top China Stocks While investors gear up for Alibaba Group 's (BABA) hotly anticipated initial public offering, don't forget about other Chinese stocks that are worth keeping an eye on. Today's Young Guns Screen of

    Investor's Business Daily
  • Tycoon's arrest sends shock wave through Russia

    Tycoon's arrest sends shock wave through Russia MOSCOW (AP) — The arrest of a Russian telecoms and oil tycoon has sent shock waves through the country's business community, with some fearing a return to the dark days of a decade ago, when the Kremlin asserted its power by imprisoning the country's…

    Associated Press
  • "The Retiree Next Door": How successful retirees stretch their savings

    "The Retiree Next Door": How successful retirees stretch their savingsBy the time she hit her late 40s, Toni Eugenia wasn’t sure she would ever be able to retire. Eugenia, 56, a pharmacy technician who lived in Houston, was nearly $200,000 in debt and

    Yahoo Finance
  • Costco Stores in Canada to Stop Taking American Express

    “The credit card relationship between American Express and Costco Wholesale Canada will not be renewed when it expires” on Dec. 31, the company said today in an e-mail to Canadian customers. The message was attributed to Lorelle Gilpin, vice president of marketing and membership for Costco…

    Bloomberg
  • CNBC Anchor Calls Out Fed-Hater Bill Fleckenstein In Startling Shouting Match

    CNBC Bill Fleckenstein of Fleckenstein Capital appeared on CNBC's Futures Now program on Tuesday. Futures Now host Jackie DeAngelis came out swinging, asking Fleckenstein right at the top if he was willing to admit that he had misunderstood monetary policy. Sounding taken aback, Fleckenstein…

    Business Insider
  • Beanie Babies creator's sentence debated in court

    Beanie Babies creator's sentence debated in court CHICAGO (AP) — Federal prosecutors seeking to put the billionaire creator of Beanie Babies in prison for hiding millions in Swiss bank accounts told appellate court judges Wednesday that the toymaker's sentence of probation threatens to erode the…

    Associated Press
  • Apple to unveil new iPads, operating system on Oct. 21 : report

    The company plans to unveil the sixth generation of its iPad and the third edition of the iPad mini, as well as its operating system OS X Yosemite, which has undergone a complete visual overhaul, the Internet news website said. Trudy Muller, a spokeswoman for Apple, declined to comment. The iPad is…

    Reuters
  • Play

    Citi, Bank of America Offer Discounted Mortgages

    Citigroup and Bank of America will offer mortgages at discounted interest rates to help borrowers with low incomes or subprime credit. AnnaMaria Andriotis joins MoneyBeat. Photo: Getty.

    WSJ Live
  • Gilead Stock Is Falling On These Drug Setbacks

    Gilead Stock Is Falling On These Drug Setbacks Gilead Sciences (GILD) shares are backsliding Wednesday on news that the patient drop-out rate for hepatitis C drug Sovaldi is quadruple that of clinical trials. In addition, the biotech's Phase 2 study results

    Investor's Business Daily
  • Margaritaville casino owners seek bankruptcy

    The owner of Biloxi's Margaritaville casino has filed for Chapter 11 bankruptcy protection Tuesday, only hours before a hearing where the landlord aimed to seize the property. The filing by MVB Holding LLC in U.S. Don Dornan, a lawyer for landlord Clay Point LLC, said the company had planned to ask…

    Associated Press
  • Don't care about Alibaba? Here's why it may matter

    When the Alibaba Group Holding prices its initial public offering Thursday, small businesses in particular will be watching. Founder Jack Ma -the former English-teacher-turned-dot-com billionaire-has touted his e-commerce platform as a way for smaller merchants to expand their international…

    CNBC
  • Play

    Hilsenrath: Fed Still Sees 2015 for Rate Increase

    WSJ's Jon Hilsenrath discusses the Federal Reserve's decision to hold steady on interest rates, but the central bank foresees a rate increase by early 2015. Photo: Getty.

    WSJ Live
  • 10 Things You Didn't Know About Garth Brooks

    He may be a down home country boy, but there's more to Garth than meets the eye.

    AdChoicesAnswers PopSponsored
  • Venture Capitalist Makes Case Against 'Shark Tank'

    If you watch the TV show "Shark Tank" as entertainment and not to obtain a startup education, you will be benignly inspired by fellow entrepreneurs. "Shark Tank" is a reality competition show that features entrepreneurs pitching business ideas to a panel of potential investors, referred to as…

    The Wall Street Journal
  • Here's What Mark Cuban Wishes He Knew About Money In His 20s

    Cuban is the owner of the Dallas Mavericks basketball team. Billionaire investor and entrepreneur Mark Cuban is generous with his advice. When we asked him what he wishes he'd known about money in his 20s, he said:

    Business Insider
  • Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More

    Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More Stocks were firm on Wednesday morning ahead of the FOMC meeting outcome. Tuesday’s rally may have sparked higher interest again, and investors are looking for bargains

    24/7 Wall St.
  • SHOE COMPANY: Our CEO Just Disappeared And Most Of The Money Is Gone

    "and like that: he's gone." This is an actual headline from a company press release: "CEO and COO disappeared, most of the company's cash missing." (Via FastFT) In a statement, German-based shoe company Ultrasonic said its CFO,  Chi Kwong Clifford Chan, has been unable to reach the company's CEO,…

    Business Insider
  • Boeing may have outfoxed Musk, but it could have bigger problems

    Elon Musk is arguably one of the greatest entrepreneurial minds of the 21st Century, but he was outsized an old school aerospace giant. Boeing won the bulk of NASA’s contract for a space taxi.  One of the other companies vying for the deal is SpaceX, the company headed by Tesla’s Musk, will get a…

    Talking Numbers
  • Billionaire Investor Says Chinese People Work Harder And Western Companies Could Face Deep Trouble After Alibaba IPO

    Michael Moritz, the chairman of VC firm Sequoia Capital, is a huge fan of Chinese internet companies and reiterated his enthusiasm for the Chinese market in an interview with The Wall Street Journal Wednesday. The billionaire investor described the Alibaba IPO as a “major landmark event” that is as…

    Business Insider
  • As Fed takes baby steps, Cramer's trick for profit

    In turn, Cramer says making money in the market, involves looking at the environment through the lens of the Fed. "The trick is to remember that they speak for the common person," Cramer said. "The Fed wants the common person to make money." With that backdrop always in mind, Cramer says it becomes…

    CNBC