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Next for Ford and GM: More Jobs

Stocks in this article: F GM TM

DETROIT ( TheStreet) -- Against the backdrop of steady growth in U.S. auto sales, Ford (F) announced last week it will hire more workers and GM (GM) indicated it could do the same.

Toyota (TM) and Chrysler, the third- and fourth-largest U.S. automakers, also have announced or implemented new investment and related hiring this year. For all of the automakers, increased hiring is a natural outgrowth of increasing U.S. sales. In general, automakers plan hiring growth months or years in advance, given the associated demands on infrastructure and on suppliers.

On Thursday, when Ford announced it would hire or recall 2,000 workers in Kansas City to build F-150s because of growing demand, as well as Transit Connect vans, Chuck Stevens, GM's chief financial officer for North America, said the automaker has the ability to increase capacity if conditions warrant. Later, on a conference call with reporters, GM Chief Financial Officer Dan Amman said: "Our approach is to match supply and demand and where demand warrants we have flexibility."

On the truck side, GM has just started production of the 2014 Silverado, a new pickup that is arriving at dealers just as the pickup market heats up. "In a changeover year, (a capacity increase) is something we can move on fairly quickly," Amman said.

During GM's earnings call, Stevens said the automaker is currently operating its 12 U.S. assembly plants at 100% of capacity on a two-shift basis, but could expand to 120% to 130% utilization if it went to three shifts. "As we go forward and think about industry in the US at 16.5 million, 17 million (annual light- vehicle sales), we would expect to be able to meet that by increasing the number of our facilities on three shifts," he said. U.S. 2013 light-vehicle sales are expected to total close to 15.5 million.

"Obviously, that has a significant impact on thinning fixed costs, if you can run your facilities on three shifts versus two shifts," Stevens added.

GM currently employs 76,500 workers, including about 50,000 hourly workers. That is down from the 112,600 workers it employed in 2007, before it filed for bankruptcy protection, and down very significantly from the 624,000 it employed in 1954, when it had a 54% share of the U.S. light-vehicle market, three times today's share. Still it is difficult to conclude that GM's current hiring trend is not a positive sign for the company and the economy, or that the government's investment in the company, as it restructured before and during bankruptcy, was not a wise one.

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