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Published: Sunday, 5/18/2014 - Updated: 4 months ago

Toledo back as successful auto leader

Growth forecasts show 2009 a distant memory

BY TYREL LINKHORN
BLADE BUSINESS WRITER
Jeep Wranglers, built at the Chrysler Toledo Assembly complex, are a hot item. Chrysler is having a tough time meeting global demand. Jeep Wranglers, built at the Chrysler Toledo Assembly complex, are a hot item. Chrysler is having a tough time meeting global demand.
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By next month, employment at Chrysler’s Toledo Assembly complex is expected to top 6,200 workers — nearly three times as many as the complex had when Chrysler Group LLC came out of bankruptcy in 2009.

In the midst of the automotive industry’s all-out collapse, Toledo’s future as an automotive town was met with plenty of skepticism, even from people who had spent their whole lives on an assembly line.

Five years later, the uncertainty has faded. Toledo is still an automotive town, and a successful one.

“I don’t know a city in North America that has had this kind of growth,” said Bruce Baumhower, president of United Auto Workers Local 12. “I think the best example of the automotive turnaround in the nation would be right here in Toledo, Ohio.”

About 12,000 people in Toledo and its suburbs are now employed in the auto industry, up from a low of about 4,800 in 2009.

The 12,000 auto industry jobs tallied by The Blade only include people who either work directly for an automaker, or a company that directly supplies an automaker. The figure does not include people such as auto dealers or those whose companies indirectly supply components that end up in cars and trucks, and may overlook some small suppliers.

“There’s not a bigger economic driver in the county,” Lucas County Commissioner Pete Gerken said. “There’s nothing that compares.”

More than half of Toledo’s auto jobs are at the sprawling Toledo Assembly complex, where the Jeep Wrangler and Jeep Cherokee are assembled.

Coming out of Chrysler’s bankruptcy in 2009, the plant had about 2,300 employees. The complex built just 143,885 vehicles that year.

A lot has changed over the last five years. The company killed off the Dodge Nitro and Jeep Liberty, improved the Wrangler, and launched the new Jeep Cherokee — a vehicle that brought with it 1,800 new jobs last year. Earlier this year, Chrysler began hiring an additional 1,000 temporary and part-time workers to help keep production at full speed while giving tired regulars a break.

Company executives said last week that 850 of those jobs had been filled, and 200 hires have been moved to regular, full-time status.

By next month, Mr. Baumhower said there will be 6,200 employees at the plant, with a production target of more than 500,000 vehicles a year.

Of those 6,200 workers, 5,200 work for Chrysler. An additional 1,000 are employed by the complex’s on-site suppliers and parts sequencing firm.

Mr. Baumhower believes that’s the highest employment at Toledo’s Jeep facility since World War II.

“In 1944, we had 13,925 employees. [The current work force is] not an all-time high, but it’s the highest in recent history,” he said.

At 6,200 employees, the complex rivals Mercy for the third-largest employer in Toledo behind ProMedica and the University of Toledo. Mr. Baumhower said the plant’s payroll is approximately $360 million a year.

 

Bruce Baumhower, president of UAW Local 12, says the Toledo Assembly complex production target is more than 500,000 vehicles a year. Bruce Baumhower, president of UAW Local 12, says the Toledo Assembly complex production target is more than 500,000 vehicles a year.
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Investment

Big investments in new products and technology have helped spur Toledo’s revival.

Led by investments from Chrysler, more than $1.1 billion has flowed into the area since 2009.

Chrysler spent $500 million to expand and retool its Toledo Jeep plant and will put $92 million in its Perrysburg Township machining plant.

General Motors has invested $372 million in its Toledo Transmission plant on Alexis Road. Company officials have said that plant will build the most advanced transmissions GM has ever engineered.

Suppliers, including Johnson Controls Inc., Magna International Inc., and Hyundai Mobis, also have put skin in the game as they invest in new products and work to keep pace with the firms they supply.

Their employment has jumped too. Toledo Molding & Die, for example, has 160 employees now, up from 90 in 2009. Johnson Controls, which makes interior parts for the Cherokee in Northwood, has gone from 240 employees in 2009 to 530 now.

 

More than Jeep

It’s not just Jeep that’s driving Toledo’s auto industry growth.

In Perrysburg Township, Chrysler’s Toledo Machining Plant will eventually be able to build 1.2 million torque converters a year for the company’s new nine-speed automatic, a transmission Chrysler says will go in 52 percent of its vehicles by 2018. The plant, which employs about 1,000 people, builds other torque converters and steering columns.

“There’s a lot of things that are looking good for us,” said Rich DeVore, president of UAW Local 1435.

General Motors has about 1,850 employees building 5,000 automatic transmissions a day that go in a variety of front-wheel and rear-wheel drive vehicles and will soon begin building a new eight-speed automatic.

“You don’t have to beat our members over the head to realize we’ve been blessed with a second chance,” said Ray Wood, president of UAW Local 14, which represents workers at the GM transmission plant.

When Mr. Wood started at the GM plant in 1985, about 4,500 people worked there. By 2009, that dropped to fewer than 500.

“I’ve got to be honest, we had no idea how we would recover, or if we would recover,” Mr. Wood said last week

Now he believes the plant could have 2,000 employees by the end of the year, thanks primarily to the new eight-speed automatic transmission. GM says the plant has an annual payroll of $174 million.

 

Wider benefits

Debbie Maranger Menk, a researcher at the Center for Automotive Research in Ann Arbor, said that with 12,000 direct auto industry jobs in Toledo, it’s likely that another 28,000 or so are automotive dependent. That can include both companies that make parts that might eventually be used by an auto supplier, as well as jobs at restaurants, stores, hospitals, and schools.

“This is sort of a story that before the recession people had a hard time grasping, but during the recession the manufacturing industry got hit most likely the hardest and that’s when we saw all these spin-off jobs and effects ripple through the economy,” she said. “People who would never consider themselves tied to the auto industry found themselves at risk because so many auto jobs were gone.”

Put another way, “It’s vastly important in ways that we see subtly,” Mr. Gerken said.

And though the auto industry is cyclical, the future looks to be bright for more hiring.

“If I had more experienced tool and die operators and industrial electricians, I could have 50 more people working in that place, maybe 60,” said Stanley Chlebowski, owner of Maumee Assembly and Stamping.

Mr. Chlebowski’s company makes catalytic converters and seat belt brackets. He said he’s turned work down to make sure he does not take on more than the plant can handle.

 

Optimistic times

Overall, the industry is hopeful. Analysts predict sales growth to continue in North America, and Chrysler has big plans for Jeep. Both Toledo-made vehicles are selling well, though the Wrangler is especially hot. Chrysler can’t build enough to meet global demand.

“We can’t add more volume there without expanding those facilities and we think there’s a way to do that,” Mr. Baumhower said. “There are tremendous opportunities ahead for us to continue this phenomenal growth”

No U.S. plant expansions were detailed in Fiat Chrysler Automobiles’ recently announced five-year plan. However, some have questioned the company’s lofty production targets, especially for the Jeep brand. Chief Executive Officer Sergio Marchionne was asked last week if the company would consider a new U.S. site to build Jeeps. While he said he would avoid answering that, he said what the company is thinking of doing “may require the expansion of some of our sites because I can’t deal with the volume ambitions now.”

In addition to Toledo, Jeeps are built in Detroit and Belvidere, Ill.

Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134 or on Twitter @BladeAutoWriter.



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