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Foreign Automakers Offset Job Losses in U.S.

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Foreign Automakers Offset Job Losses in U.S.

Business

Foreign Automakers Offset Job Losses in U.S.

Foreign Automakers Offset Job Losses in U.S.

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Announced layoffs at Ford and GM have made headlines, but do not necessarily reflect the health of the U.S. auto industry's job market. Over the past 15 years, the number of people building autos and making parts in the United States has held just about steady, thanks to hiring by foreign automakers.

LINDA WERTHEIMER, host:

On Wednesdays our business report focuses on the workplace. Today, how many autoworkers are still going to factories?

General Motors and Ford plan to shrink in the coming years to a size that better fits their share of the market. With all the news about layoffs at Ford and GM, it may come as a surprise that overall, employment in the United States auto industry is holding up rather well. Over the past 15 years, the number of people building autos and making parts in the United States has held just about steady at just over a million.

NPR's Jack Speer reports hiring by foreign automakers has largely offset losses at GM and Ford.

JACK SPEER reporting:

In recent years, the story of the American automobile industry has actually become two different stories. In states like Michigan there's been a 32 percent decline in auto industry jobs since 1979, but alongside Detroit's decline is another equally compelling story.

Mr. DAN LORIA(ph) (Research Director at the Michigan Manufacturing Technology Center): On a national basis, job loss obviously would have been much, much worse had there not been all this foreign investment.

SPEER: Dan Loria is a research director at the Michigan Manufacturing Technology Center, a nonprofit consulting firm. He's watched as tens of thousands of auto industry jobs have left the Midwest only to reemerge in other areas of the country.

Mr. LORIA: The, kind of the epicenter of production for GM, Ford, and Chrysler, is probably about a hundred miles south of Detroit, someplace on the Ohio/Indiana line. Whereas, if you were to look at the transplants, or new American manufacturers as some people like to call them, you know, their epicenter of production is about 300 miles further south than that.

SPEER: States like South Carolina, Kentucky, and Alabama have all seen huge growth in their auto sector employment in recent years. Last year Korean automaker Hyundai, one of the newer entrants into the United States market, opened a plant in Montgomery, Alabama.

The head of Hyundai Alabama operations, MH Lee, helped to unveil the more than one billion dollar facility.

Mr. MH LEE (President and CEO of Hyundai Motor Manufacturing Alabama): Good morning ladies and gentlemen. Today, after three years of construction, and the countless of hours of pre-production testing, Hyundai Motor Manufacturing Alabama (HMMA) is officially open for the business.

SPEER: But while Hyundai is still a relative newcomer to the United States market, other foreign automakers have been building cars and trucks in the United States for decades. Around a quarter of all United States autoworkers now work for a foreign manufacturer.

Toyota has ten United States plants. That includes a soon to be opened pickup truck plant in Texas, and a plant in Kentucky where the automaker builds its top selling Camry. Dennis Cuneo is Senior Vice President of Toyota North America.

Mr. DENNIS CUNEO (senior vice president of Toyota Motor Manufacturing North America): We employ 32,000 directly, and produce I believe its nine models in the United States. And, when you add in the multiplier effect on our suppliers and dealers, we generate about, close to 400,000 jobs.

SPEER: Most of Toyota's jobs are non-union, but they pay nearly as well as union jobs at GM and Ford. One reason is, unlike the domestic automakers, Toyota is not saddled with paying large retiree pension and medical benefit costs, so called legacy costs. Toyota pays workers at its United States plants well, wages and benefits total about $50.00 an hour. Auto industry consultant Ron Harmer(ph) says that figure is no accident.

Mr. RON HARMER (Consultant): The wages that Toyota and Nissan have had in Ohio, Kentucky, and Tennessee, have actually been comparable to UAWU wages intentionally because they wanted to make sure they weren't giving the UAWU a reason to organize.

SPEER: So far, the strategy appears to be working, since transplant companies have had little trouble finding workers. Mike Britz (ph) works for Toyota at the automaker's Georgetown, Kentucky, plant.

Mr. GEORGE BRITZ: Initially, when I got a job out here, the first thing that attracted me, obviously, was the income. But the second thing was the job security, just through the Toyota name.

SPEER: Toyota, Honda, and several other foreign manufacturers are planning to build new facilities in the United States, but with Ford and GM ready to cut as many as 60,000 years in the next several years, it's doubtful foreign investment will be able to keep overall employment steady.

Jack Speer, NPR News, Washington.

WERTHEIMER: You can compare facts and figures about the world's two biggest automakers, GM and Toyota, at npr.org.

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