American auto industry about to go on hiring spree

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Even with the 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 new hires will start around $16 per hour, a little over half the pay that longtime workers get. The lower wage was a concession made by the United Auto Workers union to cut costs as the companies ran into financial trouble six years ago. New hires receive health care but get 401K plans instead of pensions, and they don’t get health care in retirement like longtime workers do. Still, their wages are better than most other factory workers, who make $13 to $14 per hour in the U.S.

The industry would be adding even more workers if not for productivity gains made since the boom years, says Kristin Dziczek, head of the labor and industry group at the Center for Automotive Research.

In 2004, the nation had 70 auto-assembly plants. Now there are only 55. But the industry will make 10.7 million vehicles in those plants this year, only 850,000 fewer than in 2004, according to Ward’s Automotive.

Executives are being forced to rethink hard lines they’ve drawn against adding space — and costs — since they closed factories during the economic downturn.

For instance, General Motors is building a 500,000-square-foot addition to its plant in Wentzville, Mo., to handle expected sales of the next generation of midsize pickup trucks due out next year.

But at Ford, executives want to keep costs down by squeezing as many cars and trucks as possible out of existing factory space, mostly by increasing line speeds and breaking up equipment bottlenecks.

“We are running a number of our plants pretty full,” says Joe Hinrichs, the company’s president of the Americas. “But we have more upside if we need it.”

The recent hiring binge is even causing worker shortages in some areas. Skilled workers such as engineers, machinists, software developers and welders are hard to find, especially in the Detroit area. Entry-level factory jobs, which start around $15 per hour, are filled quickly.

“We’re having some pretty good success finding people,” said Ken Kaiser, vice president of engineering for TRW Automotive. “But we’d like to find more, faster.”

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Associated Press Economics Writer Christopher S. Rugaber in Washington and Auto Writer Dee-Ann Durbin in Detroit contributed to this report.

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