Jump to content

Auto industry struggles to lure best, brightest

Recommended Posts

Auto industry struggles to lure best, brightest

Big 3 find it hard to fight allure, pay of finance, high-tech firms

Bryce G. Hoffman / The Detroit News

The U.S. auto industry's woes have long made it challenging for Detroit carmakers to recruit top talent. Now, the fat paychecks and big bonuses offered by financial firms are making it even harder.

Once a place promising young people aspired to be, decades of decline, the rise of high-tech hot spots such as Silicon Valley and the rich compensation at big investment banks have knocked Detroit off the top of many of their lists.

"Our best and our brightest are going to Wall Street and consulting," said Ford Motor Co. Executive Chairman Bill Ford Jr. "We can go to top universities overseas, and they want to work for us. If we went to Stanford, if we went to Caltech, if we went to Harvard or my alma mater, Princeton -- it's a much tougher sell."

That could change the face of the industry, Ford said, as fewer Americans pursue careers in engineering and manufacturing, fields that fed the nation's growth as an industrial power.

Ford has few immediate openings, but still finds it hard to lure top talent despite its recent success. Unlike its hometown rivals, the Dearborn automaker avoided a federal bailout and bankruptcy to survive a horrific downturn in the U.S. market.

Even as auto sales plunged last year, Ford's market share rose to 16.1 percent from 15 percent in 2008.

The problem of recruiting top talent is not limited to entry-level positions, however, as General Motors Co. has learned.

Executive pay caps were a condition of GM's federal bailout. Salaries for the Detroit automaker's top 25 managers were cut 31 percent and a $500,000-a-year ceiling was set for those below the rank of CEO.

"Clearly a company that undercompensates senior executives is going to have a retention or recruiting problem," GM Vice Chairman Bob Lutz said last month, before he announced he would retire May 1. "Given the rigors of the job and demands and the accountability, I would say we are being paid way, way, way below market."

Restrictions limit pool

Last December, GM Chairman Edward Whitacre Jr. added CEO to his title, in part, because federal pay restrictions made finding another chief executive difficult.

Chrysler Group LLC also accepted a taxpayer bailout and federal limits on executive compensation. The restriction does not affect CEO Sergio Marchionne because he is paid by Chrysler's controlling partner, Italy's Fiat SpA, where Marchionne also serves as CEO and was paid $6.5 million last year.

Marchionne's Chrysler duties take up at least half his time, and the U.S. Treasury approved $600,000 in stock payments for that work. The shares cannot be sold until the Auburn Hills carmaker repays the government.

Chrysler spokesman Gualberto Ranieri said the salary caps are not a pressing issue because the automaker is not recruiting senior-level executives.

Still, compensation experts say GM and Chrysler will struggle to fill senior positions as long as the salary caps remain.

"It's going to be hard to attract the top talent if you can only pay one-tenth of what that person could make elsewhere," said John Challenger of Challenger, Gray and Christmas in Chicago.

In addition, Detroit is not high on executives' relocation list, Challenger said. "The woes that have beset the American automakers over the past decade have probably scared a lot of people."

Sharing the pain

Other manufacturing businesses also face stiff competition. "Every other segment of American business is facing that," Challenger said. "The cream of the crop is going to finance and Wall Street, to Google and Apple. They can afford to pay the most."

Bill Ford worries about the country's industrial future. "They're not, with few exceptions, going into engineering and manufacturing," he said. "That's a big problem for America."

If the trend holds, companies like Ford will have to rely increasingly on foreign talent.

Challenger said the global flow of labor is becoming a two-way street. Low-skilled factory jobs are leaving the United States for places like India and China, while highly skilled positions here are being filled by people from those countries.

While Detroit's automakers find it hard to recruit at America's top schools, there is no shortage of graduates to fill open jobs.

Chrysler, now hiring lower-level engineers, has plenty of applicants. And GM's emergence from bankruptcy has some taking a second look at the company.

"There's some attraction to coming to a company and participating in its rebirth," GM spokesman Tom Wilkinson said. "It's getting better -- and there are just some people who have gasoline in their veins."

link: http://www.detnews.com/article/20100316/AUTO01/3160378/1148/auto01/Auto-industry-struggles-to-lure-best--brightest

Link to comment
Share on other sites

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

About us

CheersandGears.com - Founded 2001

We ♥ Cars

Get in touch

Follow us

Recent tweets


  • Create New...