Automakers Expected to Hire Many

02/29/96

Reuters reported that a study recently published at the University of Michigan predicts that the next seven years will bring the biggest increase in new hires at Chrysler, Ford, and GM that the auto industry has seen in more than 20 years. The study predicts that up to 250,670 new workers might be hired between 1995 and 2003, and that more than half of the people hired will be in Michigan.

The study was conducted by UM's Office for the Study of Automotive Transportation. The researchers ascribe the new hires to what they call a "retirement bubble." GM, Ford, and Chrysler all have a lot of workers who were hired before 1973 and who will soon become eligible for retirement. The study estimates that 241,969 workers will retire between 1995 and 2003 and the new hires will be needed to replace them.

Michigan was hurt worst by the 194,000 jobs which were eliminated in the auto industry between 1978 and 1994. The study predicts that Michigan will be the biggest beneficiary of the new hirings. It says that 110,000 to 120,000 of the new jobs will go to Michiganders before the hiring spree is over.

The study warns of difficulties in finding enough skilled labor to fill the positions. In the 60s and 70s researchers say it was relatively easy for a prospective employee to walk out of high school and into a job in an auto plant, but today's high-tech plants make that scenario more unlikely. The study was commissioned by the Michigan Jobs Commission to help it develop policies and programs to maintain the state's dominance in supplying skilled workers to the auto industry. Michigan Governor John Engler is expected to announce a series of educational and training initiatives, including tax credits for non-Big Three companies who provide skilled trades apprenticeship programs for new workers. Michigan expects Chrysler, Ford, and GM to lure skilled labor away from their suppliers by offering higher wages, so they will concentrate on training people to fill the slots that will open up at the supplier level.

The Governor will propose the tax credit at $2,000 for every apprentice each year. Michigan's Governor Engler has made his reputation on the welfare reform programs he has proposed, which aim to put aid recipients back to work. There has been much speculation about Engler as a possible G.O.P. candidate for vice president.

Michigan will benefit not only from the new hires, but also from the pension plans that retiring auto workers have bargained. UAW bargained contracts provide auto workers with the ability to retire with full pensions after serving the industry for 30 years. Because many employees who retire after 30 years are in their fifties, they move into new careers.

In spite of what is being reported as an employment boom, the study predicts that when retirements are taken into account, overall employment at Ford, Chrysler, and GM is expected to fall almost 30,000 by 2003.

Paul Dever -- The Auto Channel