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Auto Industry Study Provides ‘Reality Check’

May 4, 2011 by · Leave a Comment 

Honda plant in Greensburg, Ind.

Honda plant in Greensburg, Ind.

A new report co-authored by researchers at Indiana University’s Kelley School of Business, provides a revealing look at the transformation of the auto industry in Indiana, Michigan and Ohio as it emerges from the Great Recession.

It portrays how the industry’s restructuring activities — such as applying new technologies and production efficiencies, reducing costs and modifying product lines — already were underway and leading to an extended period of downsizing when the recession arrived, according to a news release.

“This report is a reality check, accepting that the regional economy is at a fundamentally different place and cannot return from where it came. However, as the auto sector works toward its revival, there are workforce issues to be addressed, particularly in the context of the growing evolution and demands of a green economy,” says the executive summary of the report, “Driving Change: Greening the Automotive Workforce.”

The report and an accompanying conference are the capstone of an 18-month U.S. Department of Labor study led by the state Labor Market Information Offices in Indiana (the Indiana Department of Workforce Development), Michigan and Ohio in collaboration with the Indiana Business Research Center (IBRC), the Center for Automotive Research (CAR) and Weatherhead School of Management at Case Western Reserve University.

The research results were unveiled today (May 4) at the conference, which was held at the Ford Conference and Event Center in Dearborn, Mich.

“A key finding of this research is that the automotive jobs growing in demand require more complex skills and knowledge, with stronger credentials, than in the past,” said IBRC director Jerry Conover. “Our study illuminates pathways to lead today’s workers to those jobs, as well as to in-demand jobs in other industries.”

According to the report, automakers face a variety of challenges imposed by global competition, government mandates and consumer demands. Finding the best balance of materials and technologies to meet these sometimes-conflicting demands requires agility and new approaches to design and manufacturing.

To help meet these challenges, autoworkers will increasingly need to emphasize integrative systems approaches, critical thinking, problem-solving and communication skills, together with a commitment to lifelong learning at all levels of the workforce.

Conover noted that the size of the work force at auto industry employers in the three-state region was cut in half over the past decade. As a result, the report also highlighted that many displaced workers will need help to find suitable alternative jobs. It offers valuable guidance to those helping displaced workers prepare for new career opportunities.

The research offers several practical responses for the industry, including:

  • The need for ongoing access to capital for the supplier network is critical to the stabilization of this sector.
  • Emerging green and cross-functional systems approaches to design, manufacturing, equipment maintenance and building construction will demand corresponding changes in the training of workers from the design center to the shop floor.
  • Strategic training for managers that emphasizes long-term planning, worker training benefits and the need to integrate complex investments could improve acceptance of the associated investment costs.
  • Current differences among definitions of green jobs and inconsistent use of occupational coding systems frustrate and complicate research efforts aimed at identifying and quantifying these jobs and identifying training opportunities.
  • Many of the workers displaced from the auto sector who will need to transition to alternate occupations are starting with limited education (high school or less). These workers will be especially challenged in finding acceptable replacements for their old jobs and will need support throughout that process.

“New opportunities are arising in other sectors of the green economy. Investment drives innovation and ultimately results in more jobs. While the automotive industry may never return to previous employment levels, there is a future for substantial automotive and green employment in the tri-state region” the report says. “Preparing a skilled green workforce for automotive and related green industries should remain a priority in this region for years to come.

“The tri-state region appears able to attract and retain research and design, engineering and systems integration jobs going forward based on its extensive talent pools and knowledge base, but faces stiffer competition from Asian players for other niches such as electronics manufacturing where the region’s infrastructure and knowledge are not as advanced,” it cautioned.

More information about project is available online at www.drivingworkforcechange.org.

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