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Hiring boom at Detroit Three likely next year

Bulk of new employees would get $14 an hour and not as many benefits

By Tim Higgins
Detroit Free Press

DETROIT: The Detroit Three automakers, while undergoing great efforts to eliminate jobs, are perhaps a year away from the largest hiring spree in recent years.

Chrysler LLC, Ford Motor Co. and General Motors Corp. will hire about 36,000 hourly and salaried people in Michigan alone over the next four years to replace people who are taking buyouts or retiring, a study from the Center for Automotive Research says.

The bulk of those Michigan jobs will be hourly production positions.

New high school graduates could see the benefit of the hiring boom next year, researchers from the Ann Arbor, Mich., center say, largely because the new, nonassembly production jobs will pay $14 an hour, about half of what automotive jobs have paid, and they won't include retiree health benefits or a defined pension.

The lower rate for so-called nonassembly positions is allowed under the contracts approved by the UAW and the automakers last year. The union and automakers have not yet announced which jobs will be considered nonassembly positions, but it could include jobs such as subassembly and material movement. Workers would have the chance to move to higher-paid jobs.

Detroit's automakers are in the middle of reducing their work forces. GM recently offered buyout packages to all 74,000 of its UAW hourly workers after posting a record $38.7 billion loss for 2007.

Ford has offered buyouts in an effort to get rid of at least 8,000 of its hourly workers. Chrysler is seeking to decrease its hourly work force by 21,000.

Since 1999, Michigan has dropped from 316,300 auto industry jobs to around 129,000 at the end of last year, according to the center's research.

In 2009, the Detroit car companies are predicted to hire around 19,000 hourly workers in Michigan. That is roughly equivalent to 17 percent of how many high school students are expected to graduate in Michigan next year or as much as 40 percent of those graduates who are expected to enter the workplace instead of going to college or the military.

The companies are expected to hire about 24,000 hourly workers in Michigan through 2011, after which new production positions are not expected. A total of 36,000 people are expected to be hired in Michigan in the next four years.

''The strain on Michigan's labor market supply could be considerable in 2009, and perhaps into 2010. . . . Historically, the Detroit Three have not hired new high school graduates directly into the plants in decades,'' the report said. ''The newly negotiated second-tier compensation level ($14 an hour and a lower level of benefits) will mean that, for the first time, the Detroit Three will be competing directly with the supplier sector for new hires.''

The reports says Detroit automakers plan to eliminate a total of 38,000 jobs through 2016 because of falling production but that the companies also plan to do a lot of hiring to replace an aging work force. Through 2016, the Detroit Three are expected to hire about 77,000 people in the United States, according to the report, of which 57,000 are to be hired in the next four years.

''These new hires are necessary because the Detroit Three are projecting large-scale employee attrition through 'baby boomer' retirements,'' the report said.

Richard McMillan, vice president of economic and work force development at Macomb Community College, said automakers are more likely to turn to young people with work experience than to somebody straight out of high school.

There might be a disconnect between what the automakers are willing to pay and the skills they want from new workers.

Kristin Dziczek, the Center for Automotive Research's senior project manager and an author of the new study, said the automakers want new production workers to be able to handle the growing complexities of manufacturing work by having high levels of literacy and math and possess computer, communication and teamwork skills.

''They want a very mature worker, and up until now they've been able to get that with the allure of higher wages and benefits at the Detroit Three by hiring from suppliers, by hiring from the dealer tech population, by hiring workers with 8 to 10 years of experience already. Paying $14 an hour with no discernible difference in their benefit package is going to dip down to high school students,'' she said.

The outlook for engineers is good. CAR analyst Sean McAlinden said research and design spending should increase. ''We think that it will get better based on the technical challenges that are ahead of this industry,'' he said. From now until 2016, automakers in the United States will hire about 13,000 engineers.

Chrysler, Ford and GM took part in the study with Honda of America and Toyota Motor North America.

DETROIT: The Detroit Three automakers, while undergoing great efforts to eliminate jobs, are perhaps a year away from the largest hiring spree in recent years.

Get the full article here.


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