FASTEN YOUR SEATBELT

Area Development Site and Facility Planning, Oct/Nov 2005 by Stackhouse, Steve

Industry Trends and Challenges

Ironically, though many automakers have found themselves needing to shrink their capacity and reduce their work forces, it won't be long before they'll actually have too few workers, according to Cole. "One of the most crucial issues we're facing is the work force and the fact that we're going to be short skilled people in the next five years," he says. That's because much of the current work force is nearing retirement age.

There also are some concerns about the ongoing ability to find enough skilled workers in the currently hot South. "There are issues in terms of skilled trade and education of employees," Cole says. In fact, officials in Canada believe one of the reasons Toyota recently picked an Ontario site was the quality and education level of the work force, said to compare favorably to many Southern locations.

Meanwhile, there continues to be movement of auto jobs from original-equipment manufacturers to their suppliers. Nowhere is this more obvious than in Toledo, where DaimlerChrysler is building an innovative new facility that shares production duties with three suppliers. Located onsite are separate suppliers that will be handling painting as well as assembly of the body and chassis of Jeep Liberty and Wrangler models.

"Suppliers operating out of assembly plants is an interesting trend," Hammett says - and it's a trend that could catch on. "It may be that the OEMs may be assembling the final vehicle but the parts and body shop may be outsourced to a tier-one supplier all under the same roof."

An ever-growing issue facing automakers is the effect that their product has on the environment. Interest in greener technologies is one of the major factors pushing the growth of hybrids at the moment (because they cost significantly more than standard vehicles, it's hard to recoup the extra expense through savings on gasoline).

Rhys says carbon-dioxide emissions and global warming are matters that the industry won't be able to ignore, especially if consumers in China and India buy as many cars as some analysts believe they will. There will be so many cars on the road that the environmental impact could be huge.

"That means it doesn't matter how clean the internal-combustion engine is, you'll need other solutions," Rhys says. "The industry doesn't quite know where to go, but it has to go somewhere. It's going to be some time before we move about in the way that Scotty did in 'Star Trek.'"

But Rhys is an optimist who has faith that human ingenuity will find an adequate successor to the present variety of internal-combustion engine. "Probably some day in the next 10 to 15 years someone will come up with a solution. The question is not will the market respond but how will the market respond and what the market's solution will be."

In the meantime, Cole says, there's turbulence. "It will make for a very interesting period," he says. "You've got to be very prudent, cautious, and not jump too quickly with decisions. When the turbulence is high, you want to make sure your seat belt is fastened."