Hiring Returns To Auto Industry
This year's big auto conference in Traverse City is wrapping up on an upbeat note.
An industry, that has lost hundreds of thousands of jobs in recent years, has now shifted into a slow hiring mode. Fifty thousand jobs were added in the past year, but the pace is expected to pick up.
"We will, despite slow growth, add 182 thousand more automotive jobs, in manufacturing, through 2012 in the U.S. industry, including suppliers," says Sean McIlindin, chief economist for the Center for Auto Research.
McIlindin says many of those jobs will be added in the Midwest, and the growth in the auto industry will exceed the growth in other more glamorous "green" industries.
While, overall, the long term trend is expected to be toward fewer, more efficient auto plants, there are companies that are looking for ways to expand their production.
"We're looking at every possible opportunity to grow our production," said Hyundai North America president and CEO John Krafcik. We need more capacity to meet consumer demand. At this point, nothing's off the table."
Krafcik said that could include a new plant, or expanding production at existing facilities. Hyundai hopes to have a decision within four weeks.
Ford's President of the America's Mark Fields moved on from this conference to his company's Chicago Assembly Plant, which recently added another shift to build the new Explorer. Fields is hosting President Obama, and touting the plans to export the new Explorer to a number of countries.
"We're very hopeful that we can increase our exports," said Fields. "Again, it's another proof point that America can compete, and we can produce compelling products that will be desired by folks around the world."
The mood is also better at suppliers, where those that survived the downturn are starting to pick up business.
"Profits are up for many of the automotive suppliers," said Bill Kozyra, CEO and president of TI Automotive. "Suppliers in general can benefit from the actions they took last year, and the industry volumes."
But where are those volumes going? Many analysts see sales returning to pre recession levels in the next few years. But McIlindin of the Center for Auto Research says there are other issues that are keeping car sales low, and could keep them down for a while.
"The automotive consumer and automakers are in a stare-down over pricing."
McIlindin says the good news is those higher prices are making car companies profitable again.
But, he sees no pent up demand from car buyers. He sees a "bubble" that's still being burned off from the years of car sales in the 16-17 million range.
That puts a relatively large number of late model used cars on the market, and means there are a lot of people who have fairly new cars in their garage, with no need to buy a new car, if they can't get one at a discount.
"It may not end until these vehicles—which are the most durable in history, you built them too well, they do not rust--literally wear out, and the wheels fall off"
