Auto industry hiring again, outpacing other sectors

Ben Edwards, a former housing contractor, is a team leader at the Volkswagen plant in Chattanooga, Tenn. ASSOCIATED PRESS Enlarge

DETROIT -- Volkswagen AG opened a 2,000-employee plant in Tennessee last month. Honda Motor Co. is hiring 1,000 in Indiana to meet demand for its best-selling Civic. General Motors Co. is looking for 2,500 in Detroit to build the Chevy Volt.

The auto industry is hiring again.

Its 12 percent increase in jobs compares with a 0.2 percent gain for the economy as a whole, excluding farming and adjusted for seasonal variation, since June 2009.

"The buzz is incredible around here about what opportunity we're going to get if we can build a great product," said Ben Edwards, who went to work for Volkswagen in Chattanooga last year and is now a team leader on an assembly line that installs tires and seats.

Mr. Edwards was a general contractor until the housing market dried up. He said the pay at Volkswagen, which starts at $14.50 an hour, is fair and the benefits are generous.

Automakers are hiring again because car sales are rising. Americans bought 10.4 million cars and trucks in 2009 and 11.6 million in 2010. This year, they're on track to buy 13 million or more.

The auto gains have been widespread, with the Midwest the biggest beneficiary. In Ohio alone, auto manufacturing jobs have risen 31 percent the past two years, and parts makers in Michigan have added nearly 20,000 jobs.

Jobs in the auto industry began disappearing in 2006 and 2007 as U.S. automakers tried desperately to restructure. Dozens of auto suppliers were pushed into bankruptcy.

Then came 2008, when gas prices spiked and the financial crisis struck. The industry lost almost one in every four of its jobs. By the time GM and Chrysler Group LLC got out of bankruptcy, in June, 2009, the industry employed about half as many people as it did in 2000.

Sales and profits have risen ever since, and payrolls have followed.

GM, Ford Motor Co., and Chrysler are making money for the first time since the mid-2000s and are adding employees to build popular models such as the revamped Ford Explorer. Foreign companies, stung by the high cost of exporting cars to the United States when the dollar is weak, are racing to build more products here.

Four years ago, the United Auto Workers agreed to a contract that allowed Detroit's car makers to hire some new workers at $14 an hour, or half the starting pay of previous employees. Although the UAW doesn't represent workers at most foreign-owned plants, those companies -- such as Volkswagen -- generally match UAW pay.

U.S. auto employment may never reach its previous heights. The industry last topped 1 million employees workers in 2007, and most analysts don't expect it to reach that level again. The Center for Automotive Research predicts total industry employment of about 877,000 in 2025.