Automotive Career Field

Automotive Careers Background

Automotive CareersThe automotive industry plays a vital and powerful role in world economies, in terms of the value of its product, the jobs it creates, the income it generates, and the taxes it pays. The industry as a whole employs people at all levels of the occupational spectrum, from highly skilled engineers and scientists to semiskilled assemblers.

The modern automobile can be traced back to the 1880s, when German automobile pioneers Karl Benz and Gottlieb Daimler developed a gasoline-powered internal combustion engine. Before Benz and Daimler, inventors working independently all over the world had experimented with self-powered vehicles, but these early steam-powered automobiles were noisy, dangerous, and cumbersome. The gasoline engine proved more flexible than steam engines, as well as more reliable, smaller, and easier to mass-produce.

The design and manufacture of gasoline-powered automobiles began to flourish in the United States. Charles Duryea and Frank Duryea built the first U.S. model in 1892–93. Other early American gasoline-powered automobile producers include John Lambert, Gottfried Schloemer, Elwood Haynes, Brady King, and Ransom Eli Olds, whose Oldsmobile became the first commercially successful American-made automobile, selling 5,000 cars in 1904.

Three main factors in early 20th-century America signaled the automobile’s success in this country: the nation’s rapid population growth, its large and expanding middle class, and its geographic vastness. With such potential for demand, American automobile manufacturers needed an efficient and affordable new method of producing their cars. Henry Ford believed that mass-produced cars could and should be affordable to the average person. He wanted to build “a car for the great multitude.” This car was the Model T. It first sold for $950 in 1908 (a price tag most middle-class Americans could not afford), but went down drastically in price as Ford’s assembly line became more efficient; it sold at $360 in 1916 and as low as $290 in 1926. In his efforts to make the Model T more affordable, Ford developed a moving conveyor belt for his assembly line. Speed and efficiency of car manufacturing was greatly improved from this point on.

Henry Ford was also a pioneer in employee management. He believed strongly that workers who were happy and successful at home could be more productive on the job. He implemented the five-dollar day in 1914, a high wage for the time, and lines of men seeking jobs formed outside his factories. The five-dollar day was a profit-sharing plan. In order for a worker to receive his share of the profits, the company required that “he must show himself to be sober, saving, steady, industrious, and must satisfy the staff that his money will not be wasted in riotous living.” Ford also encouraged his workers to purchase Ford vehicles.

Ironically, it was Henry Ford’s good intentions that laid the groundwork for his trouble with unions. Many employees didn’t like the control Ford exercised over their lives and added this protest to already growing discontent over working conditions that often included long days, few breaks, and increases in assembly-line speed by management. The United Auto Workers (UAW) union was founded in Detroit in 1935 and through the years has lobbied the industry for benefits such as pensions, unemployment for laid-off workers, and cost of living wage increases. The largest and longest postwar strike was from November 1945 to March 1946, by the UAW against General Motors (GM).

By the end of World War I, Ford was the dominant American automobile manufacturer with his Model T. Ford’s only potential U.S. competitor at the time was General Motors. General Motors was founded in 1908 in Flint, Michigan, by carriage manufacturer William Durant. By the mid-1920s, a new major competitor to Ford and General Motors joined the market. Walter Chrysler took over the failed Maxwell Motor Company in 1925 and founded the Chrysler Corporation, thus completing the so-called Big Three of the American automobile industry.

During World War II the major automakers stopped producing cars and helped with the war effort by building military vehicles and weapons. After the war, the world output of automobiles skyrocketed from 10 million a year in 1950 to 30 million a year in 1970. During this period the United States lost its dominance in automobile production to the Japanese automakers, who soon became the world leaders.

In the 1970s, Japanese automobile manufacturers made the next big advancement in the industry with their implementation of highly specialized computer automation to the assembly line. Automation had been used before by most manufacturers but not to the extent introduced by the Japanese. The new automation incorporated computer-controlled robotic mechanisms capable of simulating precise human hand and arm movements to a variety of tasks, such as welding, riveting, drilling, and painting. The mechanisms were programmed by physically moving them through each task and precisely recording each movement. The machine then stored this information and repeated it continuously without error. It was not until the 1980s that American manufacturers began employing similar types of automation in their assembly lines.

Environmental regulations and the high price of gas in the 1970s and 1980s ushered a shift in American automobile preferences to the smaller, more fuel-efficient cars made by the Japanese and Europeans. Throughout the 1970s, 1980s, and early 1990s, the American and European manufacturers saw a general decline in the industry, while the Japanese manufacturers still managed to do quite well. After six years of consecutive growth, 1989 through 1991 were dismal years for the U.S. industry. Sales finally went up in the mid- to late-1990s. Today, the automobile industry’s success fluctuates on a quarterly basis, with some of the major manufacturers reporting quarterly losses in the millions of dollars, yet rebounding sharply the following quarter with significant earnings.

In the 1980s, as the global economy became more prevalent and definable, the larger automobile manufacturers became multinational corporations by opening facilities, called transplants, in other countries. Transplant operations allow foreign manufacturers to bypass costly tariffs and unpredictable fluctuations in foreign exchange rates, which are reflected in a vehicle’s price. Further evidence of globalization can be found in Chrysler’s 1998 merger with the German company Daimler-Benz. Other recent mergers include Ford’s purchase of Jaguar, Volvo, and Land Rover; GM’s merger with Saab and other foreign automotive companies. In 2006, Toyota Motor Company surpassed Ford to become the second-largest carmaker in the United States, behind General Motors. Faced with rapidly rising gas prices, and having invested heavily in making SUVs and other larger vehicles, American car manufacturers have struggled to compete. Ford’s sales fell 32 percent and G.M.’s sales dropped by 19.4 percent from mid-2005 to mid-2006.

Detroit remains the headquarters of the major U.S. automobile companies, but many of the manufacturing plants are located throughout the country. The majority of the industry’s employees work in the Great Lakes region, including Michigan, Ohio, and Indiana. Almost 25 percent of all jobs in the automotive industry are in Michigan. While aspects of motor-vehicle manufacturing take place in nearly every state in the country, most of the remaining workers are found in California, Kentucky, Tennessee, Missouri, and Texas.

The U.S. Department of Labor reports that production workers employed by establishments that manufactured complete motor vehicles earned a median hourly salary of $22.45 in 2004—wages that are among the highest in all industries in the United States. For full-time work, this translates to a yearly salary of $46,696. In addition, many companies cover the cost of approved education courses in the industry. The major manufacturers also offer exemplary benefits packages to their employees. Benefits packages vary from business to business. Auto industry employees can expect health insurance and paid vacation from most employers. Other benefits may include dental and eye care, life and disability insurance, and a pension plan. Yearly bonuses or profit sharing can be added to salaries if the business does well.