Automakers account for about a third of the state's industrial expansion
by Patrick McCreless
pmccreless@annistonstar.com
Oct 31, 2012 | 4088 views |  0 comments | 8 8 recommendations | email to a friend | print
Quality control workers at the Honda plant in Lincoln inspect new vehicles. (Anniston Star photo by Bill Wilson)
Quality control workers at the Honda plant in Lincoln inspect new vehicles. (Anniston Star photo by Bill Wilson)
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Alabama’s auto industry is selling more cars now than last year and has ramped up hiring to match the increased demand.

Sales figures show that across the board, state auto manufacturers, including the Honda plant in Lincoln, have sold more vehicles to date this year compared to the same period last year. The result has been expansion efforts at various plants and increased hiring. Industry experts say that though the auto industry as a whole is not where it was before the recession, its improvement is encouraging.

Steve Sewell, executive vice president for the Economic Development Partnership of Alabama, which works to attract and maintain industry in the state, said the main Alabama automakers have added jobs as they have expanded their operations in the last year. Sewell said about one-third of all industry expansions in the state this year have been in the auto industry.

“They are keeping pace with demand,” Sewell said. “Production is up at all the state auto manufacturers.”

For instance, the Hyundai plant in Montgomery this year announced it was adding a third shift to its operations to keep up with demand, creating 877 jobs in the process, Sewell said. Also, the Mercedes-Benz plant in Tuscaloosa recently added a third shift to add a new sedan to its product line, he said.

The Honda plant has also done its fair share of expansion this year, adding a new vehicle quality inspection building and increasing production capacity to include the new Acura MDX Luxury SUV in the product line in 2013. As a result, the plant has hired 450 new workers.

Mark Morrison, spokesman for the Honda plant, said the Japan-based automaker initiated expansions at the Lincoln facility to be prepared once the economy started improving.

“We knew sales would come back,” Morrison said.

Indeed, sales have improved for the auto industry across the country. According to numbers from Edmunds.com, an auto-industry analyst firm, Honda’s sales have increased 24 percent this year compared to the same period last year. During the same period, Mercedes-Benz’s sales have increased 15 percent and Hyundai’s has increased 9.5 percent.

“The market in general is up,” said Bill Visnic, auto analyst and senior editor for Edmunds.com. “We had just gone to just such depressed levels and now we are returning to more of a natural kind of level.”

Visnic said when the recession was at its worst around 2009 and 2010, many consumers and businesses simply delayed their vehicle purchases.

“Now they are at a point where their vehicles have to be replaced,” Visnic said.

The state’s job market has benefited from the increased demand.

According to the Alabama Department of Labor, there were 28,600 Alabamians working in September for auto manufacturers and their suppliers, compared to 26,300 in January.

“It’s been a good year for the auto industry,” Sewell said.

Lew Drummond, executive director of the Alabama Automotive Manufacturers Association, said state auto manufacturers are hiring not only high-skilled workers and engineers, but also temporary workers.

“A lot of manufacturers have increased employment through temp agencies,” Drummond said. “It gives them more flexibility in case the economy takes another nose dive.”

Morrison said Honda does use temporary employees but does not reveal how many of those are included in its workforce, which exceeds 4,000, due to the highly competitive nature of the auto industry.

“Historically, we use temporary manpower to provide flexibility and coverage of production processes when Honda associates take vacation or leaves of absence and to manage temporary manpower needs during spikes in market demand,” Morrison said.

Keivan Deravi, an economist at Auburn University Montgomery, noted that many of the auto jobs being created this year are new and are not replacements for layoffs made during the height of the recession. He said the state’s automakers dropped production considerably, but kept layoffs to a minimum.

“Every company I’m talking to … they cut overtime and then did some sort of work hours reduction … they didn’t really adjust employment size … just work hours,” Deravi said. “Then when the recovery started, they raised hours … and there has been some hiring among the suppliers.”

Of the 28,600 September autoworkers, 17,100 were working at auto suppliers while 11,500 were working for auto manufacturing plants.

Sewell agreed with Deravi about the state auto industry’s handling of the recession.

“We’re all extremely impressed with how they have managed operations and minimized layoffs,” Sewell said.

Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.
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