Sign of a Comeback: U.S. Carmakers Are Hiring

U.S. CarmakersFew years ago, American automakers cut tens of thousands of jobs and shut dozens of factories simply to survive. But since the recession ended and General Motors and Chrysler began to recover with the help of hefty government bailouts and bankruptcy filings, all 3 Detroit car companies including Ford have achieved one of the unlikeliest comebacks among industries devastated during the financial crisis. The steadily rising auto sales, two-tier wage concessions from labor have spurred a wave of new manufacturing investments and hiring by the 3 Detroit automakers in the United States. The latest development occurred on Thursday, when Ford said it was adding 450 jobs and expanding what had been a beleaguered engine plant in Ohio to feed the growing demand for more fuel-efficient cars and S.U.V.’s in the American market. Ford, the nation’s second-largest automaker after G.M., said it would spend $200 million to renovate its Cleveland engine plant to produce small, a turbocharged engines used in its top-selling models. Ford plans to centralize production of its two-liter EcoBoost engine, used in popular models like the Fusion sedan and Explorer S.U.V, at the Cleveland facility by the end of next year. Its move to expand production in the United States is another tangible sign of recovery among the Detroit auto companies. Industrywide sales in United States are expected to top 15 million vehicles this year after sinking beneath 11 million in 2009. Last month, General Motors announced plans to invest $600 million in its assembly plant in Kansas City, Kan., one of company’s oldest factories in the country. And Chrysler, the smallest of Detroit car companies, is adding a third shift of workers to its Jeep plant in Detroit. The biggest factor in the market’s revival has been the need by consumers to replace aging, gas-guzzling models. “Pent-up demand and widespread access to credit are keeping up the sales momentum,” said Jessica Caldwell, an analyst with auto research site Edmunds.com. Joseph R. Hinrichs, head of Ford’s Americas region, explained in an interview that the company’s Ohio revival plan was “all based on the increased demand.” “We’re putting capacity here because that’s where we need it most”. Even though Ford is enjoying a resurgence in U.S., it is racing to reduce costs in its troubled European division. Workers in Spain who were building the small EcoBoost engines that have been shipped to America will be moved to an assembly plant that is taking on work from a plant to be closed in Belgium (…..)

Link: http://www.nytimes.com/2013/02/22/business/ford-expanding-ohio-engine-plant.html

Acerca de ignaciocovelo
Consultor Internacional

4 Responses to Sign of a Comeback: U.S. Carmakers Are Hiring

  1. Professor Uziel Nogueira says: The re-election of Pres Obama gave new impetus to initiatives to bring manufacturing jobs back to the US. The automotive industry is an acid test whether employment can be recovered in this key sector. The news in this piece are a good beginning but not enough for the US working class go to paradise. Two economic variables play a fundamental role in sustaining automotive/industrial jobs: wages/benefits and the exchange rate, the value of the dollar. Lower wages + lower benefits are determinant factors in those jobs created by Detroit. According to the text, many of the 450 new workers at the Cleveland plant will start at $16 an hour, compared to about $28 for veteran union members. To be competitive internationally, wages + benefits paid to US workers must be comparable or lower than those paid to Spanish and Mexican workers. Robust industrial employment in the US can only be sustained with a weak, devalued currency with higher inflation rates as the main downside. The era of a strong dollar is definitive over IF industrial jobs creation become the main economic goal to be pursued. The car industry shows that globalization created a highly competitive global job market. US workers either accept lower wages/benefits or lose their jobs to foreign workers. As the old maxim goes, there is no such thing as a free lunch. The war for well paid jobs among the highly indebted industrial countries attest the validity of that.

    http://www.nytimes.com/2013/02/22/business/ford-expanding-ohio-engine-plant.html

  2. John Ramella: Ford eco-boost is a game changer. It will be featured next year in the Grand Am series and will be racing at the 24 hours of Daytona. A 4-cyclinder turbo competing against big v-8 BMW and GM dinosaurs.

    http://www.nytimes.com/2013/02/22/business/ford-expanding-ohio-engine-plant.html

  3. r5169: Ha, ha, the good news with your statement is that the rivalry between GM and Ford is officially back. As a GM retiree, I’m happy to say, John, bring it on… I know GM has been stuck with the “Government Motors” monicker, but I happily remember the more halcyon days of the 1960s, when we said Ford stood for “Fix or Repair Daily.” Let’s go racin’ boys!

    http://www.nytimes.com/2013/02/22/business/ford-expanding-ohio-engine-plant.html

  4. Professor Uziel Nogueira says: I haven’t read any Consumer Report since I left Washington DC, 17 yrs ago. At that time, the best 10 vehicles sold in the US market, none were made by Detroit. Did the craftsmanship of the big 3 improve since them?

    http://www.nytimes.com/2013/02/22/business/ford-expanding-ohio-engine-plant.html

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