November 11, 2022 Who’s Building Our Cars?

What can auto companies do to keep their assembly lines running in an economy where job-seekers are in the driver’s seat?

By Jason Essenberg, Vice President Peak Teams, TrueBlue

For more than two and a half years, COVID-19 has shaken the US economy, especially the automotive sector. Supply chain issues disrupted car and truck imports, and delays on critical components forced North American factories to slow production. Supply chain issues are improving, but another issue threatens to keep the industry from pre-pandemic levels: finding workers to build the vehicles. What can companies do to keep their assembly lines running in an economy where job-seekers are in the driver’s seat?

The pandemic did a number on the auto industry. An Economist Intelligence Unit survey of supply chain managers in August of 2021 showed auto manufacturing and sales as the most impacted industry in the first six months of the lockdown. For more than two years the availability of new cars — especially from Asia — slowed to a crawl. Even worse, components US factories needed to make vehicles weren’t available. This perfect storm ground one of the most important American industries to a halt.

By early 2022, some supply chain issues affecting North America were rapidly improving. The speed of shipments from Asia, the main bottleneck for US manufacturers, thankfully rose. This led to a big upswing in manufacturing in the last six months, especially for the automotive industry: according to the Federal Reserve, the motor vehicle and vehicle parts production rose 6.6 percent, while other sectors rose only 0.3 percent.

The Labor Problem

Auto factories are roaring back to life but facing one significant challenge: too few qualified people to build cars and trucks. According to Deloitte, more than 2.1 million manufacturing positions in the United States remain unfilled. Manufacturers say it is 36% harder to find talent today than in 2018, and 77% of executives expect difficulty hiring and keeping workers. This is expected to cost the US economy more than a trillion dollars.

This is especially true in rural areas, and it’s not a new problem: as far back as 1998, the United States Department of Agriculture issued warnings about a skills gap threatening to drive non-urban factories out of business. You need trained employees to operate increasingly complex machinery. Nearly 25 years later, rural manufacturing is facing significant challenges, unable to hire and keep skilled workers. Since many automotive factories are based in these parts of the country, the industry is facing another crisis.

American manufacturing has had its challenges over the decades, but the problems have gotten worse these last two years. In 2021, the so-called “Great Resignation” saw millions of American workers walk away from their jobs with no Plan B. A lot of this was fueled by pandemic-related burnout, but it was really a reflection of how Millennials and Generation Z view work.

It’s easy for older generations to describe younger workers as lazy or entitled, but reality is a lot more complicated. People under 35 represent the first generation in American history that doesn’t expect to have a higher standard of living than their parents. Saddled with student loans, credit card debt, and soaring housing prices — not to mention stagnant wages and high inflation — this attitude is unsurprising.

Millennials and Gen Z want to work on their own terms, and not burn out trying to reach a goal that seems impossible. More recently, younger workers have begun engaging in “work-to-rule” practices, refusing to do more than the minimum required by their job description or contract. This puts pressure on employers to adjust their standards rather than expect workers to perform effectively unpaid labor. 

The Solution

With labor being the most significant problem facing the US automotive sector, vehicle and parts manufacturers aren’t just sitting on their laurels. They’re envisioning new approaches to staffing their facilities, building strong teams and attracting talent even through a shortage of workers in rural parts of the country.

One approach rapidly gaining traction is to outsource hiring and management to third-party companies specializing in recruitment and operations. This model wasn’t even on the radar a decade ago because manufacturing companies saw themselves controlling every side of their operations. In today’s decentralized world, this is no longer true. It is increasingly common for companies to build hybrid workforces.

This process starts with a full assessment of workforce challenges to decide what teams should actually look like in an organization. Saying there is a shortage of workers doesn’t address the fundamental question of which kinds of workers are needed. Specialized staffing firms can help make this list and create job requirements to give companies the best chance at attracting the right talent.

The next step is to train and manage these teams. Both functions play a critical role in employee satisfaction and retention. Automotive manufacturers are experienced in designing and building cars, but may not have the same skill when it comes to building training programs that keep employees feeling engaged. This training should be done on site. In a tight labor market, a personal connection builds stronger teams.

The world changes every day, and work forces need to reflect these shifts. Successful organizations are always adjusting their teams to drive value. For example, if certain components are unavailable, employees who would otherwise be sitting idle can be reassigned to perform other work until the supply chain issues resolve.

There is no magic button to easily hire and retain dream teams of amazing workers. Posting open jobs on the Internet and waiting for resumes to roll in won’t do it. Today’s workers are in control of their careers, and they know it.  People are not simply going to take the first available spot on an assembly line. It needs to be the right job at the right salary, doing work they can be proud of. In this climate, by bringing in third-party specialists to hire, train, and manage their teams, automotive companies can grab a competitive advantage, getting as many cars on the road as their factories can roll out.

Jason Essenberg is the Vice President of Peak Teams at TrueBlue Inc and is devoted to finding new staffing opportunities for employees and employers alike. He previously worked at Kontane Logistics for over ten years, departing as President in 2022. Jason attended Appalachian State University and currently resides in Summerfield, North Carolina.

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