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Automakers plan to hire thousands of workers this year

The hiring binge comes as sales continue to rebound and firms increase the output of U.S. factories to avoid currency troubles overseas.

January 12, 2012|By Jerry Hirsch, Los Angeles Times
  • A worker inspects a vehicle being made at the BMW factory in Spartanburg, S.C. BMW said it will hire 300 workers this year at the plant.
A worker inspects a vehicle being made at the BMW factory in Spartanburg,… (Ariana Lingquist, Bloomberg )

The U.S. auto industry plans to add thousands of jobs this year as sales continue to rebound and automakers look to produce more cars in the United States to sidestep currency woes overseas.

The growth in domestic manufacturing is coming as U.S. auto sales are recovering from historic lows during the recession.

"The yen, the euro, all the currencies that affect the manufacturers' balance sheets, except for the dollar, are in flux. So the only way to hedge is to build where you sell," said Rebecca Lindland, an analyst with IHS Automotive.

On Thursday, German automakers joined the U.S. hiring binge.

The commercial truck division of Mercedes-Benz and the factory that builds BMW sport utility vehicles said they would add a total of about 1,500 jobs at plants in the Carolinas this year.

They joined domestic automakers Ford Motor Co. and Chrysler Group, both of which said in the last two weeks that they would add close to 6,000 factory workers altogether at plants in Michigan, Kentucky and Illinois.

Electric car makers Tesla Motors Inc. and Coda Automotive Inc. also plan to ramp up employment in California as they bring vehicles to the market this year.

And Japanese automakers also are adding workers as they shift more production to the U.S. in a bid to avoid profit erosion caused by the soaring value of the yen.

They all are bracing for more sales this year. Automakers sold 12.8 million vehicles last year, a 10.3% increase from 2010 and the most since 2008. They expect sales to reach about 13.8million this year.

The growth is pushing the need for more workers. Total payrolls at U.S. auto plants could reach 650,000 employees this year, a 10% gain, according to the Center for Automotive Research in Ann Arbor, Mich.

Some jobs will be at a lower wage — about $15 to $16 an hour — than the base wage of about $28 to $29 earned by current workers because of recent labor agreements. Each company with a labor contract will determine how many of the hires are recalled workers and how many are new hires.

As recently as a decade ago, the industry employed about 1 million workers. It then fell into a steady decline that included layoffs of 200,000 workers during the recession. At the low, about 550,000 workers were employed in auto manufacturing.

Hiring started to climb back slowly over the last two years. Now, the research center forecasts employment will top 750,000 in 2015.

One factor is that overseas automakers plan to add factories in the U.S., Lindland said.

Audi executives said they will build a U.S. factory, possibly at the Volkswagen complex in Chattanooga, Tenn.

Nissan also is adding about 1,000 workers in Tennessee as it gears up for production of the Leaf electric vehicle and its batteries, as well as new Pathfinder and Infiniti SUVs.

South Korean automotive siblings Hyundai and Kia also are said to be considering a major expansion in the South.

Automotive employment growth represents a small but important segment of the U.S. economy, said Beth Ann Bovino, senior economist at Standard & Poor's.

"Putting money in people's pockets is good," Bovino said. The comparatively high blue-collar wages offered in the auto factories allow "people to spend on high-ticket items" and generate more economic activity, she said.

But the small size of the auto manufacturing sector — and even manufacturing overall — dampens the effect, she said.

"Manufacturing has shrunk so much. It used to be above 30% of total employment in the mid-1960s, and it has dropped to about 8%," she said.

Service jobs, by comparison, make up about 70% of nonfarm payroll employment.

Still, the strong auto industry is bolstering manufacturing and signaling that consumers are doing some buying and that businesses are moving to replace equipment.

Daimler Trucks North America, part of Mercedes-Benz, said it will hire 1,100 workers this year as it adds a second shift and ramps up production at its Freightliner truck factory in Cleveland, N.C. Daimler said it will fill most of its positions by recalling workers who were laid off in 2009.

Daimler said is has a six-month back-order list for the Freightliner Cascadia model used by long-haul truckers. Daimler will hire 100 employees at its nearby components and logistics plant in Gastonia, N.C., to support the expansion.

BMW said it will hire 300 workers this year at its Spartanburg, S.C., factory, where it builds sport utility vehicles, and will invest $900 million in the plant by 2014.

The automaker is expanding production at the factory to meet global demand for its X series of SUVs, said Frank-Peter Arndt, BMW's production chief. It exports the vehicles to 130 markets around the world.

The hiring plans by the German automakers follow similar announcements by domestic manufacturers.

Ford said at the North American International Auto Show in Detroit this week that it would add about 5,500 jobs this year, largely at factories in Wayne, Mich.; Louisville, Ky., and Chicago.

The move fulfills almost half of the commitment Ford made to the United Auto Workers union in last year's contract agreement to add 12,000 jobs at U.S. plants by 2015.

Also, Chrysler said it will add 1,250 jobs at factories in Detroit where it builds the Jeep Grand Cherokee and will launch a new version of the SRT Viper sports car.

jerry.hirsch@latimes.com

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