US auto industry poised for hiring spree
But pay, benefits lower than before
DETROIT — The auto industry is about to go on a hiring spree as car makers and parts suppliers race to find engineers, technicians, and factory workers to build the next generation of vehicles.
Factories are operating at about 95 percent of capacity, and many are running three shifts. As a result, some auto and parts companies are doing something they have been reluctant to consider since the recession: adding floor space and spending millions of dollars on new equipment.
‘‘We’re really bumping up against the edge,’’ said Michael Robinet, managing director of IHS Automotive, which forecasts auto production. ‘‘So it really is brick-and-mortar time.’’
The auto industry’s outlook is bright. Vehicle sales for 2013 could reach 15.5 million, the highest in six years. To meet that demand, automakers must find more people. Hundreds of companies that make parts for automakers have to hire, too, just to keep up.
‘‘As volume goes up, we will really need to add heads,’’ said Mel Stephens, a spokesman for Lear Corp., which makes automotive seats.
From January through May, automakers and parts companies hired about 8,000 workers, a relatively slow rate. But the pace is picking up. The Center for Automotive Research expects the industry to add 35,000 over the full year. The hiring plans are widespread. Chrysler Group LLC, Honda Motor Co., General Motors Co., Mercedes-Benz, and Ford Motor Co. plan to add more than 13,000 people this year.
Large parts companies such as Lear, BorgWarner Inc., and TRW Automotive Holdings Corp. are hiring at factories and research centers. Smaller suppliers are adding jobs, as well.
Car companies and parts makers created 167,500 jobs from the end of the recession in June 2009 through May. At the same time, US auto sales rose from a low point of 10.4 million in 2009 to an annual rate of over 15 million so far this year.
Most industry analysts predict that US auto sales will rise gradually during the next five years. Estimates for this year range from 15 million to 15.5 million, compared with 14.5 million a year ago. LMC Automotive, a forecasting firm, predicts sales will gradually increase to 17 million in 2017. That would be almost equal to the boom years of the late 1990s and early 2000s.
Analysts say sales will climb as more people reach driving age. Also, many consumers and businesses have vehicles they bought last decade, if not earlier. The average vehicle age is a record 11.2 years old.
Even with added hiring, the auto industry isn’t the job creator it once was. In 2005, before huge cuts began, more than 1.1 million people made motor vehicles and parts. Today, 798,000 do, according to the latest government statistics.
For engineers and many white-collar jobs, auto companies pay salaries that are competitive with the rest of the country. But wages and benefits in the factories have declined.
Most hires will start at around $16 per hour, just over half the pay longtime workers get. They get health insurance but get 401(k) plans instead of pensions, and they don’t get health care coverage in retirement, as longtime workers do.
The industry would be adding even more workers if not for productivity gains, said Kristin Dziczek, at the Center for Automotive Research. In 2004, the nation had 70 auto-assembly plants. Now there are 55. But the industry will make 10.7 million vehicles this year, only 850,000 fewer than in 2004, according to Ward’s Automotive.