U.S. Automakers Are On A Roll, But Hiring Is Slow And Steady
Wednesday, June 19, 2013
There is one basic question that keeps being asked about the U.S. auto industry: Is it on the rebound?
"People ask a lot, is the auto industry back?" says Kristin Dziczek, a director at the Center for Automotive Research. "And it depends on what scale you want to look at."
So if we're looking at scales, let's start with productivity. In this case, how many work hours it takes to build a car. Productivity in U.S. plants is 39 percent higher than it was in 2000. "Productivity has never been this high," Dziczek says.
And while sales aren't as high as they once were, vehicle prices are up -- so profitability is up, too. General Motors, Ford and Chrysler are all making money. They've been rewarding their workers with profit-sharing checks, and all the companies -- foreign and domestic -- are investing billions of dollars in North American facilities.
You'd think this would all translate into a hiring frenzy, right? Not so much, according to Dziczek. "Employment's still got a long way to go," she says. Before the economic crash there were over 1 million autoworkers. That number has now fallen to below 700,000, Dziczek says. [The Bureau of Labor Statistics puts the number at just under 800,000.]
The car companies are adding workers. Eight thousand employees were added in the first part of 2013, and Dziczek says many more will still be added. But the addition of those workers is sort of slow and steady compared with how auto companies have recovered from recessions historically.
Right now, plants in the U.S. and North America are running above 90 percent capacity. That means the number of shifts and hours worked have increased and car plants that used to, say, have one assembly line now have two.
"There's no doubt that the industry is stressed right now," says Michael Robinet, an analyst with IHS Automotive. The car companies, both foreign and domestic, have learned the lessons of the economic crash almost too well, he says. "The days of 2008 and 2009 still linger well in our industry."
All the automakers are being extremely careful about adding capacity, Robinet says, whether it's workers or bricks-and-mortar assembly plants. He says car companies are not ready to expand the number of plants in the U.S. unless they're absolutely sure they'll be needed for a long, long time. And companies like Volkswagen are expanding in Mexico, but no new U.S. facilities are on the books for the foreseeable future.
Meanwhile, Dziczek with the Center for Automotive Research says the industry has never seen productivity this high for such an extended period. The question, she says, is "how long can this go on before you start having some issue with morale in the plants."
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