Automakers Starting To Hire Again….As They Expect A better Year Ahead
Posted By thestatedtruth.com on January 18, 2010
January 18, 2010
The added jobs amount to just a fraction of the roughly 40,000 that carmakers shed during their tailspin last year. But it is a sign that the big manufacturers expect business to improve this year.
Significantly, several automakers are making big investments in their lines of trucks as they anticipate that an improved outlook for housing and construction will encourage contractors and tradesmen to buy new vehicles.
Although it has not announced a resumption in hiring, General Motor Co. plans to put $1 billion into developing new versions of its full-size pickups, the Chevrolet Silverado and the GMC Sierra, a vote of confidence in the idea that construction and housing starts are about to rebound.
“Pickup sales are unbelievably correlated with housing starts,” said Mike DiGiovanni, GM’s executive director of global market and industry analysis.
“We are pretty confident that the economy is turning,” he said.
Automakers are preparing for a far better year of sales than they are admitting, said Sean McAlinden, chief economist for the Center for Automotive Research in Ann Arbor, Mich.
He believes that auto sales will grow about 20% this year to 12.4 million vehicles. Most automakers are estimating a gain of roughly 10% to 11.5 million.
But McAlinden noted that even his more optimistic sales estimate, if made two years ago, “would have been a horrible market.” He said the recovery in both jobs and sales could be uneven.
An unfavorable currency exchange rate creates a powerful economic incentive for the Japanese nameplates to increase production here, he said.
“For all but the most expensive luxury models, they are unable to make money on a car they import when the yen is under 100 to the dollar,” he said.
Payrolls at Detroit’s Big Three automakers dropped to 178,000 from more than 200,000 last year, and they are likely to continue their slide this year.
“There are another 15 plants scheduled to shut down through 2012, and that would push employment down to 150,000,” McAlinden said.
The combination of closure and hiring plans represents a decades-long shift of auto assembly jobs out of the Midwest and Northeast to the South as international automakers open new factories and build their sales in the U.S., McAlinden said.
Complete article at:Â Â http://www.latimes.com/business/la-fi-autos-hiring18-2010jan18,0,2762921.story
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