REF­ER­ENCE MARK

Motor Trend (USA) - - Contents - @markrechtin Mark Rechtin REF­ER­ENCE MARK

Jobs Jobs Jobs ... but where are the work­ers?

“Build it where you sell it” used to be the mo­ti­va­tion for for­eign au­tomak­ers to bring plants to Amer­ica—as well as to avoid trans­port costs, to achieve quicker-to-mar­ket tim­ing, and as a hedge against cur­rency-ex­change fluc­tu­a­tions.

But to­day, it’s sim­ply cheaper to build cars here than it is in South Korea or Ger­many or Swe­den.

Au­tomak­ers might have taken a breather dur­ing the dev­as­tat­ing re­ces­sion of 2008–2010, lay­ing off hun­dreds of thou­sands of auto work­ers as ve­hi­cle sales plum­meted and the need for sec­ond and third pro­duc­tion shifts waned. But auto fac­tory em­ploy­ment is now at a higher level than be­fore the last sales peak—just be­fore the econ­omy col­lapsed in 2008, ac­cord­ing to the Bureau of La­bor Sta­tis­tics (see chart below).

It’s good news for Amer­i­can work­ers that there is a new Toy­ota-mazda plant in Alabama, a new Volvo plant in South Carolina, and an ex­pan­sion of Daim­ler’s op­er­a­tions in Alabama. In fact, in some auto sec­tors there are more jobs open than there are qual­i­fied work­ers to fill them. Why? Put sim­ply: poor skills and low wages.

Auto man­u­fac­tur­ing expert Mike Robi­net, man­ag­ing di­rec­tor for data gi­ant IHS Markit, says some au­tomak­ers have had to de­lay pro­duc­tion or miss a third shift be­cause they (or their sup­pli­ers) couldn’t find enough trained or train­able peo­ple and thus suf­fered short­ages of la­bor or crit­i­cal parts. He cites Denso’s new $1 bil­lion plant in Maryville, Ten­nessee, which will build bat­tery in­vert­ers and power sup­plies, as hav­ing to “im­port” peo­ple from out­side the Knoxville area to fill the 1,000 jobs that will staff the plant.

A Denso spokesper­son re­sponded that the com­pany “is not ‘im­port­ing’ work­ers,” merely “adding new strate­gies to reach a larger ra­dius or mar­ket than in the past.”

To­mayto. Tom­ahto.

As early as 2014, there were signs that Amer­ica might lack the skilled and semi-skilled la­bor­ers needed to fill its avail­able auto jobs. That year, I at­tended a gather­ing of the Ja­pan-amer­ica So­ci­ety of In­di­ana, where ex­ec­u­tives from three ma­jor au­to­mo­tive sup­pli­ers—aisin Seiki, NTN Drive­shaft, and Enkei Amer­ica—said they couldn’t fill key po­si­tions at their south­ern In­di­ana op­er­a­tions be­cause there weren’t enough qual­i­fied ap­pli­cants. Well, sort of.

It used to be that, back in the golden age of man­u­fac­tur­ing, skilled work­ers on the assem­bly line re­ceived a re­spectable blue-col­lar wage, owned a home, and sent their kids to col­lege. But re­cent re­ces­sion­driven la­bor con­tracts (or lack of la­bor in­flu­ence al­to­gether) have al­lowed au­tomak­ers to drive wages down— es­pe­cially for new­com­ers to the fac­tory.

The av­er­age hourly wage for an au­toworker in Amer­ica was $22.09 in 2008, a num­ber that has inched to $22.39 over the past decade, ac­cord­ing to the Bureau of La­bor Sta­tis­tics. But if wages had merely kept pace with in­fla­tion, they should av­er­age $25.94 an hour to­day.

Re­mem­ber, this is an av­er­age. Lots of grand­fa­thered work­ers with se­nior­ity make well more than this amount. But many of the new auto jobs be­ing cre­ated are ac­tu­ally in the $9 to $15 per hour range, ac­cord­ing to a re­cent piece of in­ves­tiga­tive re­port­ing by Bloomberg Busi­ness­week. That’s not much in­cen­tive for a skilled job seeker seek­ing to sup­port a fam­ily. And low­er­ing the bar for new em­ploy­ees will­ing to ac­cept those wages means the in­dus­try has to deal with less qual­i­fied can­di­dates, higher ab­sen­teeism, and failed drug tests, Robi­net says.

Of course, cer­tain eco­nomic sup­plyand-de­mand the­o­ries con­tend that with 4 per­cent un­em­ploy­ment and jobs go­ing beg­ging, au­tomak­ers and sup­pli­ers might have to sweeten the pot a lit­tle to bring in new hires.

What’s good for GM (and Ford and Toy­ota) is good for Amer­ica. But more to the point, what is good for Amer­i­can work­ers is good for Amer­ica, too. They should be treated ac­cord­ingly, both by train­ing and by what they earn. It’s great that auto jobs are back. Now wages need to fol­low suit. n

New plants are good news for U.S. work­ers. In fact, in some sec­tors there are more jobs than qual­i­fied work­ers to fill them.

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