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Automakers to add jobs as recovery takes hold

January 12, 2010

Automakers to add jobs as recovery takes hold

Big 3, Toyota plan to boost production of hot sellers, hybrids

The Detroit News

Detroit — Automakers signaled plans Monday to hire, add overtime or extra shifts and boost production of crucial models, all signs of life for an industry emerging from a tumultuous year that saw General Motors Co. and Chrysler Group LLC file for bankruptcy.

GM, Chrysler, Ford Motor Co., Toyota Motor Corp. and Mercedes-Benz used the industry’s brightest stage, the North American International Auto Show, to announce the plans. Automakers, reeling from one of the worst sales years in decades, scaled back on production and laid off thousands last year — both permanently and temporarily. But with their operations resized and confidence returning to the economy, some are ramping up again.

Chrysler plans on hiring additional engineers; Toyota is bringing back temporary workers it had laid off; and Mercedes is increasing production of sedans at an Alabama plant.

GM North America President Mark Reuss said the automaker could reopen some factories shuttered last year, but didn’t offer any specifics. The Detroit automaker is facing a shortage of some of its most popular models, such as the Chevrolet Equinox, GMC Terrain and Cadillac SRX, and increasing production could help in the automaker’s frustrated quest for a larger piece of the vehicle market, analysts said.

While GM and others are still below traditional production levels, the news marks a stark reversal from a year ago. That’s when GM, for example, made unprecedented production cuts, idling 20 plants across North America and slashing output.

The move to increase production and capitalize on hot-selling vehicles also marks a philosophical shift for GM.

"This willingness to roll the dice and invest quickly in added capacity is something new," Vice Chairman Bob Lutz said Monday. "That is why we have never been able to gain share. We won’t roll the dice and go with our winners. (Chairman and CEO Ed) Whitacre decided, ‘Well, why don’t we just stop doing that right now.’ "

‘In a growing mode’

GM is doing some hiring after cutting 5,000 salaried and 16,000 blue-collar jobs last year, including 35 percent of its executive ranks, Whitacre said Monday.

"We’re not (in) shrinking mode," he told reporters. "We’re in a growing mode."

Ford has begun hiring salaried employees, including engineers, but has no immediate plan to add factory workers.

"In certain areas, there is a need," said Ford Americas President Mark Fields. "We’ll go out selectively and recruit folks."

Ford also announced plans Monday to bring 1,000 jobs to Michigan by 2012 as the automaker expands production of electric vehicles and battery packs.

Chrysler is filling engineering jobs, including hiring 400 contract workers since August.

"We still could use more," said Scott Kunselman, Chrysler’s head of engineering.

Chrysler will bolster its roster of a couple of thousand staff engineers by 7 percent, he said, and increase contract engineers and outsourced work 100 percent.

"Chrysler needs help and they’ve been hiring" as it tries to turn its fortunes around, said auto analyst Aaron Bragman of IHS Global Insight.Toyota is rebuilding its ranks, too.

"We’re now hiring temporary workers as production starts to come back," said spokesman Mike Goss. Toyota, poised to start a second shift at its San Antonio truck plant, has brought back nearly 2,000 temporary workers in North America, Goss said.

The Japanese automaker let go of nearly all its contract workers during the toughest months of the downturn but did not lay off regular factory workers.

GM’s Reuss would not be specific about plant re-openings, production increases or new hires, saying he is finishing plans.

"If I’m doing my job right, I’d like to be able to hire," he said. "My job is to put the right capacity to products. I think I know what I want to do."

Mercedes-Benz, meanwhile, will add C-Class production to its Tuscaloosa, Ala., plant in 2014, making 80,000 four-door sedans a year, said Ernst Lieb, head of Mercedes-Benz USA.

"Our intention is to build more products at Tuscaloosa than today, so we would need to do some hiring," said Daimler AG Chairman Dieter Zetsche.

GM faces critical shortages

GM’s vehicle inventory fell to 385,000 last year, its lowest year-end level on record, leading to critical shortages of key vehicles.

GM sales chief Susan Docherty drilled that point home Friday during a meeting with Whitacre. When he reached across the table to congratulate her on exceeding December sales goals, she shook his hand, thanked him and said, "I need more product."

Docherty said GM has several options: approve overtime at certain plants, hire temporary workers, add a body shop at some plants or another shift. Such changes take about 60 days to implement.

"The company is taking a much more aggressive approach. Not just in adding capacity, but you’re also seeing it in the design of new vehicles," said analyst Erich Merkle of "But they’ve got some models that aren’t performing as well, so it will be a mixed bag until the product cadence is revved up."

GM has forecast first-quarter North American car and truck production of 650,000, a 75 percent increase from a year earlier.

"Coming out of a recession, you can leave a lot quicker than when you go into it," Docherty said. "We need to respond quickly and ride what’s hot. We don’t need to be drunk and disorderly here but we need to pay attention to where the demand’s at."

Bryce G. Hoffman and Christine Tierney contributed.

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