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March 18, 1996 01:00 AM

BIG THREE SOON MAY PLUNDER SUP PLIERS' STAFFS

Lindsay Chappell
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    DETROIT - Auto suppliers, be-ware: Your customers are about to hire away your employees. A quarter of a million of them, more or less.

    A new study by the University of Michigan concludes that the Big Three automakers face a human resources meltdown around the country, and especially in Michigan. After two decades of minimal new hirings, the domestic auto industry is reaching a ``retirement bubble.''

    More than 30 percent of the total U.S. Big Three work force now is more than 51 years old with nearly enough seniority to retire.

    That will force the automakers to hire 212,000 people in the next seven years just to meet current production de-mands, the report says. If Big Three market share rises five points, they will have to hire more than 250,000 people.

    If so, that will mean that more than 40 percent of the Big Three's U.S. hourly and salaried work force will turn over by 2003. The most likely source for all those new workers: the friendly parts supplier down the street.

    ``It's a human-resource food chain,'' said Brett Smith, co-author of the study by Michigan's Office for the Study of Automo-tive Transportation. ``The people we talked with at the Big Three told us, `We don't have a hiring problem. We can go to our suppliers and get everyone we need.'*''

    The findings were released at the annual Society of Automotive Engineers International Congress and Exposition, held Feb. 26-29 in Detroit.

    Smith said the hiring outlook actually is graver than the official report puts it. The university's research team found cases of Big Three U.S. plants near the point of worker walkouts over inadequate staffing. Smith cites unnamed plants where training programs and vacations have been suspended in order to keep up with production demands.

    ``A lot of people with 25 years' seniority are working so hard they're saying, `To hell with this. I can't do it anymore,' '' Smith reports.

    One 49-year-old worker at a General Motors Corp. parts plant in Flint, Mich., who asked not be identified, admitted that the pace is wearing on many in his factory. He already has enough seniority to retire. A 53-year-old friend in the plant plans to retire this summer.

    ``We've got a lot of people around here working 12 hours a day, seven days a week,'' said the worker, halfway through his own double shift. ``They need more people.

    General Motors has hired virtually no new factory workers since the 1970s. In fact, the giant corporation has been under the gun to downsize for most of the past decade, closing excess factory lines and moving unneeded employees into early retirement.

    As a result, the remaining work force is creeping nearer to retirement age at a time when product demand is strong.

    As of January, GM's pool of laid-off workers with recall rights stood at 2,500. Three years ago, the pool of laid-off GM workers stood at 25,000.

    The likely short-term outlook for the industry is ``mass retirement and mass hirings,'' Smith said.

    The hiring will cut across job descriptions, including assembly workers, engineers and managers.

    The study reports that the automakers have unmet needs for manufacturing engineers, body engineers, safety engineers and what one automaker called ``multicultural engineers.'' Those are engineers with the language skills to work on international projects.

    Factory workers are the biggest part of the retirement bubble. As of last year, more than 230,000 hourly workers had more than 21 years of seniority. About 144,000 of them had more than 26 years.

    With 30 years, an hourly worker may retire with a full pension.

    The report was approved by the study's sponsor, the Michigan Automotive Partnership, a consortium of eight large and medium-sized suppliers and the Big Three automakers.

    The report notes that suppliers could insulate themselves from Big Three employee poaching in the next seven years by paying higher wages.

    In Michigan, supplier wages typically average $8-$12 an hour, about half what a car assembler would earn. Yet the automakers are exerting strong pressure for the suppliers to cut or hold the line on costs.

    ``By skimming the best employees from their suppliers, the Big Three are able to capture proven, capable talent that can quickly be used in production or engineering operations,'' the report concludes.

    ``The supplier is often the only loser. They have invested time and resources in training the employee, only to see the re-wards of the investment realized by the vehicle manufacturers.''

    The automakers' most logical alternative - hiring and training newcomers to the industry and recent school graduates - simply won't work, Smith contends.

    ``There are just not enough qualified people out there to take all these jobs,'' he said. ``It takes five to 10 years to become an automotive engineer.''

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