Workforce planning for a global automotive economy.

Abstract

Globalization of the automotive industry continues to accelerate as offshore manufacturers and suppliers open production facilities in North America, and North American companies invest overseas and throughout the North American Free Trade Agreement (NAFTA) region. But perhaps the most compelling reason to globalize is to reduce costs that would otherwise trickle down to consumers (as higher prices) and shareholders (as reduced profits). Pressure to rein in costs has become fierce in the last few years, spurred by the ever-increasing market share of leaner Japanese companies. With labor-related costs among the highest that companies incur in normal business operations, outsourcing labor has become a popular financial fix as automakers call on both contract labor and their suppliers to take on more of the production involved in bringing a vehicle to market. And as overseas workers in both blue- and white-collar positions become better educated and more skilled technically, the popularity of offshoring is increasing.