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Help Wanted: Automakers Can’t Fill All the Jobs

U.S. auto industry on a hiring binge and struggling to find necessary workers.

by on Apr.03, 2012

Automakers can't meet demand for all their open jobs.

The jobs were there, more than 1,000, according to the Engineering Society of Detroit, with everyone from the Detroit automakers to Korea’s Hyundai looking to hire.  What, or more precisely, who weren’t there were the job-seekers.

March was another good month for the U.S. auto industry, which is expected to report another month of double-digit, year-over-year sales gains today.  After years, of cutting back production – closing dozens of plants and eliminating an estimated 88,000 jobs during the Great Recession – that means automakers are racing to build back up production capacity.  They’re also looking to fill empty slots in design, engineering and other departments cut to the bone during the industry’s worst downturn in decades.

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Detroit makers alone have created 10s of thousands of jobs since hitting bottom in 2009 with the bankruptcy of Chrysler and General Motors.  And their foreign-owned rivals are also putting out the “Help Wanted” signs.  Volkswagen is already planning a second round of hiring at its new assembly plant in Chattanooga, Tennessee.  BMW is expanding at its factory in South Carolina.  Hyundai’s Alabama assembly line needs more help to meet booming demand.

And the search is especially frantic in suburban Detroit.  Some of the new jobs are coming at places like Chrysler’s Jefferson North Assembly Plant, along the Detroit River, which will soon be running three shifts building products like the Jeep Grand Cherokee.  But the real rush is to find trained engineers.

Virtually every major automaker – indeed, plenty of minor ones, including some not selling product in the U.S. – has an engineering center in metro Detroit.  With key government testing facilities and an entrenched knowledge base, everyone needs to be there, explains the Engineering Societys Della Cassia.  She recalls when Chrysler, pre-bankruptcy, let go of 3,000 engineers and support staff, “) and our phones wouldn’t stop ringing with people looking for jobs.  Many had families and were desperate.”

But at recent job fairs, like the one on March 31st, employers were the ones lined up waiting.

Neil De Koker, the president and CEO of the Original Equipment Suppliers Association, tells a similar tale.  Two years ago, Altair Engineering, one of OESA’s 410 member companies, “had plenty of applications and no jobs.”  A few months ago, they put out the word that “they had 700 engineering slots and no one to fill them.”

Part of the problem is that the industry now needs to attract a largely new workforce at a time when engineering schools are struggling to fill slots and turn out fresh talent.

The bulk of the engineering employees released by the struggling Detroit makers over the last five years were older workers nearing the end of their careers.  They were often given buyouts that helped nudge them into a less painful retirement.  “And now,” laments De Koker, “they just aren’t interested in coming back.”

Detroit isn’t the only place where the industry is hiring.  While the Motor City may have the lead when it comes to issues like homologation – bringing products into compliance with federal mileage, emissions and safety laws – there’s a growing automotive presence on the West Coast.  Silicon Valley has seen a rapid expansion of carmaker engineering facilities focused on infotainment and related in-car technologies, as well as research into autonomous driving.

Ford just opened a new R&D center near Stanford University, a hotbed of such technological research.  It follows other established auto manufacturers including General Motors, the Renault-Nissan Alliance, BMW, Volkswagen and Mercedes-Benz.  That’s where the engineers skilled in high-tech work, explains Dr. Dieter Zetsche, CEO of Mercedes’ parent Daimler AG.  But as with Detroit, industry officials say it’s been tough filling the jobs.

Even when older workers are there they don’t necessarily qualify, cautions Dr. David Cole, chairman-emeritus of the Center for Automotive Research, in Ann Arbor, Michigan.  “The changes in technology are happening so fast that in many cases, the skills set is missing.”

Cole, long associated with U of M, has helped create a non-profit called “Building America’s Tomorrow,” which aims to not only increase the number of students who go into engineering but also lure them, along with established engineers, to Michigan.  Ford CEO Alan Mulally is among the project’s advisors.

In the meantime, the situation is becoming ever more serious for those with an empty desk.  “Three years ago they were paying people to leave. Now we have to put even more money on the table to get them back,” says Gerd Kleinert, chief executive of KSPG Automotive, a supplier of cylinder heads, pumps, valves and pistons.

In fact, one of the biggest concerns right now, says ESD Executive Vice President Darlene Trudell, is that companies are raiding each other in a desperate bid to hire on the necessary talent, further driving up labor costs.  And for lowly suppliers, that’s a serious challenge when they are competing against the deep pockets of major auto manufacturers, like GM, Ford or Toyota.

For the engineers who got pink-slipped when the auto industry was in dire straits, the situation is very different today.  If they’re still looking for work and have the right skills it would be difficult not to find a job.  But for those who had been cutting engineering operations three years ago the challenge today is finding the necessary talent.  And that equation isn’t likely to change any time soon.

Portions of this story first appeared in D:Business magazine.

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