BMW finding skilled workers for less
Foreign companies find cheaper wages for better talent in U.S.
By Peter Whoriskey The Washington Post
GREER, S.C. When German automaker BMW put out the call recently to hire a thousand factory workers here, the people who responded reflected the upheaval occurring in the U.S. economy. Among the applicants: a former manager of a major distribution center for Target; a consultant who oversaw construction projects in four Western states, and a supervisor at a plastics recycling firm. Some held college degrees and resumes in other fields where they made more money. But they're all in the factory now making $15 an hour about half of what the typical German autoworker makes. The trade debate in the United States usually focuses on the jobs lost to factories in the developing world. But the recession has forced countless skilled workers in this country to consider jobs they would have rejected in the past. They now offer foreign manufacturers a resource that was far less common just a few years ago: cheaper wages for better talent. "We are a low-wage country compared to Germany," said Kristin Dziczek, director of Labor and Industry Group at the Center for Automotive Research. "And that helps put jobs here." But the price of having a more globally competitive workforce means more in America could fall well short of the middle-class living standards that manufacturing workers once could expect. Wages adjusted for inflation have declined for these workers since 2003.
At GM and Chrysler, new hires make $14 an hour, or half the amount that existing workers take home. Likewise, at the BMW plant, which is not unionized, new workers earn a little more than half of what those hired earlier make. Some still seemed stunned by their change of circumstances. But they are almost uniformly grateful for the opportunity. "It's the best place I've ever worked in my whole life, I can honestly say that," said Debra Harrison, 50, who was laid off at an Electrolux factory 2½ years ago and began at BMW in July.
While U.S. manufacturing employment has been in a decades-long slide, the BMW campus here has grown in the 16 years since opening, and is viewed by some as a model of what manufacturers American or not might achieve.
It employs 7,000 and has generated thousands of additional jobs in the region at auto parts shops and suppliers. Moreover, more than 70 percent of the vehicles produced at the factories here are exported, and an Obama administration commerce official who visited the campus last week, Rick Wade, called the plant an "example" of what is possible to move toward the president's goal of doubling exports in five years.
"We live in a global economy, and this is an example of what can be a win-win," said Sen. Lindsey Graham, R-S.C., who last week attended the opening of a new 1.2 million square-foot facility. Because of BMW's success in this Greenville suburb, "Southern politicians are tripping over themselves to attract foreign manufacturers." Indeed, among the other large private employers in the area are Michelin, the French tire maker and Robert Bosch, another German manufacturer.
The wage differential between German and U.S. workers is just one advantage BMW finds here. The primary reason for the factory, executives emphasized, is that the United States is the automaker's largest foreign market. Locating here, among other things, helps moderate the effects of currency fluctuations between the two countries.
"We needed a bigger production capacity `here~ to balance production and sales in the U.S.," BMW Group Chairman Norbert Reithofer said at the opening. "And for me that is the most important point." New hires at the plant are not directly employed by BMW, but come through a contractor, though the automaker says some of the new workers might eventually be hired by BMW and work their way up to the higher wage. BMW declined to say what their factory workers in Germany make, explaining in part that comparisons are difficult to make because of benefits packages and differing job categories. The United States is the automaker's biggest foreign market.
This is the exact example of the future. We can do what BMW is doing and upgrade the skills of Low Income Workers or we can wait for the Recession to end, as if that was a real choice.
A definition of insanity is to keep repeating the same actions and expect difference results.
Have we waited long enough for the Recession to end... by itself? Like waiting for a candle to end and expect the sun to come out, as soon as the candle burns out?