After a year of layoffs and factory closures, automakers plan to start hiring again
Even as they finish closing plants from their worst sales year in decades, beleaguered automakers are also starting to hire again -- almost 5,000 workers in the coming year.
The added jobs amount to just a fraction of the roughly 40,000 that carmakers shed during their tailspin last year. But it is a sign that the big manufacturers expect business to improve this year.
Significantly, several automakers are making big investments in their lines of trucks as they anticipate that an improved outlook for housing and construction will encourage contractors and tradesmen to buy new vehicles.
Volkswagen of America is hiring 2,000 people as it gets ready to build a new sedan in Chattanooga, Tenn.
Toyota Motor North America plans to add a second shift to its truck factory in San Antonio, a move that requires an additional 850 employees, and it could add several hundred more workers at other factories as it ramps up production from the depressed levels of last year.
South Korean manufacturer Kia Motors is recruiting at least 1,200 workers to assemble the newest generation of its Sorrento crossover vehicle at its factory in West Point, Ga.
Looking ahead, Ford Motor Co. said it expected to hire about 1,000 workers starting in late 2011 at a factory in Wayne, Mich., where it will build a next-generation hybrid and plug-in hybrid vehicle.
Chrysler Group has added about 400 designers and engineers, at least on a temporary basis, as it starts to rebuild a segment of its workforce that Chief Executive Sergio Marchionne said was decimated by layoffs last year.
Although it has not announced a resumption in hiring, General Motor Co. plans to put $1 billion into developing new versions of its full-size pickups, the Chevrolet Silverado and the GMC Sierra, a vote of confidence in the idea that construction and housing starts are about to rebound.
“Pickup sales are unbelievably correlated with housing starts,” said Mike DiGiovanni, GM’s executive director of global market and industry analysis.
Sales of full-size pickups jumped to 13% of the vehicle market in December, more than a full percentage point higher than its share for all of 2009, DiGiovanni said.
“We are pretty confident that the economy is turning,” he said.
Toyota is ramping up after suffering a 42% decline in sales of its big Tundra pickup last year.
“Our inventory got very low after we cut back production last year, so we need to start building more to match the current pace of sales,” Toyota spokesman Mike Goss said.
Toyota also is hiring 800 workers at a factory in Ontario, Canada, where it will start a second production shift for the RAV4, a small sport utility vehicle.
Automakers are preparing for a far better year of sales than they are admitting, said Sean McAlinden, chief economist for the Center for Automotive Research in Ann Arbor, Mich.
He believes that auto sales will grow about 20% this year to 12.4 million vehicles. Most automakers are estimating a gain of roughly 10% to 11.5 million.
But McAlinden noted that even his more optimistic sales estimate, if made two years ago, “would have been a horrible market.” He said the recovery in both jobs and sales could be uneven.
Foreign automakers with U.S. factories will add jobs at a faster rate than the three domestically headquartered companies, he said.
Employment at factories owned by foreign automakers declined by about 15,000 jobs to 90,000 last year, “and we expect it to get back to 100,000 as the economy recovers,” McAlinden said.
An unfavorable currency exchange rate creates a powerful economic incentive for the Japanese nameplates to increase production here, he said.
“For all but the most expensive luxury models, they are unable to make money on a car they import when the yen is under 100 to the dollar,” he said.
The yen traded at 90.86 to the dollar Friday.
Payrolls at Detroit’s Big Three automakers dropped to 178,000 from more than 200,000 last year, and they are likely to continue their slide this year.
“There are another 15 plants scheduled to shut down through 2012, and that would push employment down to 150,000,” McAlinden said.
A portion of the new Toyota jobs represents a shift out of California. About 4,700 workers will lose their jobs in March when Toyota closes the New United Motor Manufacturing Inc. factory in Fremont. GM pulled out of the jointly operated factory when it filed for bankruptcy reorganization last year, and Toyota decided that it did not want to continue operating the plant. The factory made a line of smaller pickups, production that is moving to San Antonio.
The combination of closure and hiring plans represents a decades-long shift of auto assembly jobs out of the Midwest and Northeast to the South as international automakers open new factories and build their sales in the U.S., McAlinden said.
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