U.S Automakers Hiring, But It's Not All Good News

May 31, 2011
Ford's 100,000th hybrid rolls off the Kansas City assembly line in March 2009

Ford's 100,000th hybrid rolls off the Kansas City assembly line in March 2009

For U.S. automakers, business is up and the days of bankruptcies and government bailouts are in the past. Ford is hiring, GM is hiring and Chrysler is hiring.

All want automotive engineers and all want automotive line workers, but that doesn’t mean you should hop on a plane to Detroit with your resume in hand. Most of the “new” jobs have already been filled by previously laid-off workers, and here’s where the good news potentially turns to bad. UAW workers had been accustomed to wages that supported a middle-class lifestyle, and their benefit package had been second to none. Job banks provided laid-off workers with income, even allowing for cost-of-living and annual pay raises for unemployed line workers.

Those days are gone, replaced by a new reality: the starting wage for entry level, second-tier automotive line workers is now $14 per hour at many plants. That's $4.89 less than the average hourly U.S. manufacturing wage. Although plant conditions have improved throughout the years, line work is still physically demanding, and critics of the lower wages fear that they won’t provide ample motivation to retain skilled workers. On the other hand, even $14 per hour jobs will help alleviate Michigan’s high unemployment rate, currently at around 10.2 percent.

New benefit packages aren’t nearly as generous as those in the past, and it remains unclear if entry level workers will have a defined path to higher future wages. Some plants have new hires working alongside veteran line workers, who may earn up to twice as much for the same work. Tension between the two sides is inevitable, which only adds to already high turnover rates for new employees. Nick Waun, an assembly line worker at GM’s Lordstown, Ohio plant, told The Detroit News, “Some (new hires) would take off during lunch. One guy told me you can make the same amount at Home Depot for an easier job.”

High turnover is costly for the automakers, as training new employees costs both time and money. Still, manufacturers are optimistic that relatively secure jobs, with full benefits, are enough to attract new workers who would otherwise be unemployed.  Said Max Wright, a line worker at GM’s Orion Township plant, “In Michigan right now, it’s difficult to find $14 - $16 per hour jobs, with full benefit packages. If it’s between a second-tier (lower-paying job) and no job, I’d rather have a job.”

[Detroit News]

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