Mackinac Auto Panel: U.S. Globally Competitive, But At A Cost
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MACKINAC ISLAND (WWJ) – The American auto industry is on a “slow and steady growth path up,” even though it now accounts for a mere 12 percent of global auto production, a panel said Wednesday at the Detroit Regional Chamber’s Mackinac Policy Conference.
America has made its automotive work force globally competitive but at a cost, according to Tim Leuliette, president and CEO of Visteon Corp.
Leuliette said that 30 years ago, an auto worker made $40 an hour in today’s dollars, and paid zero for their health care. Today’s auto worker makes $17 an hour and must pay $200 a month for health care.
“So we have taken that manufacturing base and transferred it from the middle of the middle class to the working poor,” Leuliette said. “We have repotted the American manufacturing base to be globally competitive, but at a cost. We can’t attract some of the people we used to because the opportunity to make a good living is no longer there.”
John Kennedy, president and CEO of Autocam Corp., said his company’s business has doubled from 2010 to today thanks to new auto technologies. But he said it’s hard for his company to find “middle skilled technicians.” He was more optimistic about the economic opportunity for workers in the engineering end of the auto industry, saying it’s still “a way to lead a very nice life.”
Colleen Haley, executive vice president of the U.S. OEM business unit at Yazaki North America, said her company finds adequate beginning engineers fresh out of American schools, “but we can’t staff every project with young, green engineers. We need people who know our customers, know the business, know how to get work done from the day they walk in the door.” She said such people “may have left the indsutry during the downturn.”
Leuliette described just how drastically the industry had changed over the past few years. Visteon has shrunk dramatically in the U.S. from three dozen plants to four, from 12,000 employees to 1,200. But it now has 110 plants in China and his building 10 plants a year there now.
“And we build in China for the Chinese market, we do not export from China to the U.S. market,” he said. “When we were spun off China built fewer vehicles than Belgium. Today they build more than the U.S., and are adding another U.S. in capacity. The U.S. today accounts only for 12 percent of vehicles produced on Earth. We used to dominate that business.”
Leuliette said it’s a fascinating time to be in the auto industry, between the increasing effects of consumer electronics on the automotive dashboard, and high-tech powertrains mandated by fuel economy requirements.
“Technological change in the automobile in the next 10 years will be greater than the last 30,” he said, adding that the car was becoming the world’s largest mobile device. (Unfortunately, he said, Visteon has 47 software partners now, and none of them are in Michigan.)
Leuliette said Detroit can capitalize on its engineering and manufacturing talent to establish a global center for the industry again.
And he bemoaned the business media no longer “being in love” with manufacturing, which he said is key to a solid middle class.
“Just pick the Wall Street Journal and read it, or stay home a day and watch CNBC, and you would think the only thing going on in the world is high tech and pharmaceuticals,” Leuliette said.
Haley said her company forges close relationships with Michigan colleges to keep them interested in white-collar manufacturing careers.
And Haley echoed Gov. Rick Snyder’s comment from his opening remarks, that Michigan has been through downturns before, but seemed to lose the hard lessons it learned during each downturn when times got better. We have to learn more this time, she said.