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North American auto production will near 15-year high; jobs won't

June 12, 2013|Ronald D. White
  • Tesla Motor Inc. associates work on the Model S electric car at the company's factory in Fremont, Calif. North American auto production will near 15-year high by 2015, but auto factory jobs won't return to pre-recession levels even by then.
Tesla Motor Inc. associates work on the Model S electric car at the company's… (David Paul Morris / Bloomberg )

North American auto production growth tops other industries and, by 2015, will approach levels not seen since 2000, experts said. But manufacturing jobs, while continuing to recover, will fall short of pre-recession levels in the same time frame.

The IHS Automotive Light Vehicle Production Forecast shows production in the U.S., Canada and Mexico reaching 17 million vehicles by 2015.

That would nearly double the 8.6 million vehicles made in 2009, during the global recession. The 2009 figure was also exactly half of the production of 17.2 million vehicles in 2000, IHS said.

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Additional factory space, in new or expanded facilities, will be needed to meet those production figures.

Current factories are "running at a very high capacity," Michael Robinet, managing director of IHS Automotive, said in an interview. "Further gains will have to emanate from additional capacity."

Daniel J. Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation, said in an interview that part of what is driving production growth is long pent-up demand.

"We had a prolonged period of subnormal sales," Meckstroth said, that were so low that older cars were being scrapped at a rate faster than new ones were being sold.

Although the pace of that production growth, and buying, has slowed, "it continues to rise," Meckstroth said.

"When consumers have the income and feel more confident in their outlook, they buy," Meckstroth said.

Auto and parts manufacturing jobs are recovering at a faster pace, and some fundamentals have changed from pre-recession days.

Motor vehicles and automotive parts manufacturing jobs in the U.S. in 1999-2000, for example, numbered a little more than 1.1 million.

That's according to statistics from the Center for Automotive Research.

From the already smaller level of 735,300 in 2008, those jobs fell to a low of a little more than 560,000 in 2009. By September, economic recovery brought the jobs numbers back to more than 651,000, the center said.

By 2015, the Center for Automotive Research predicts those job levels will return to about 720,000. A primary reason for the smaller numbers was heightened productivity, the Center said.

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