Auto companies to add jobs, expand plants: survey

Fri Jul 20, 2012 12:05am EDT
 
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(Reuters) - Auto companies will hire more people and expand plants over the next year to keep up with increasing consumer demand for vehicles to replace aging cars and trucks, according to a report released on Friday.

Despite worries about declining demand in Europe caused by the debt crisis and pressures on vehicle pricing, U.S. auto executives surveyed by advisory firm KPMG are bullish about their companies' prospects.

"The survey results clearly demonstrate a U.S. automotive industry that is regaining confidence," Gary Silberg, KPMG's national auto industry leader, said in a statement.

"Even though the overall economic recovery remains weak, that is not the case in automotive where pent-up demand for vehicles in the U.S. is expected to carry over for years," he added. "As a result, auto companies and suppliers are ramping up their hiring and production activities, and investing heavily in new products and facility expansion."

Industry executives have said demand for new cars and trucks should continue to drive sales as the average age of vehicles on U.S. roads is at an all-time high of almost 11 years.

Nearly three-quarters of the executives polled said their companies will continue to hire in the coming year, up significantly from the 62 percent in the 2011 survey, according to KPMG.

Almost a quarter said their companies will increase the number of employees by more than 7 percent. Twenty-one percent said personnel would increase by 4 to 6 percent, while 28 percent said the increase would be 1 to 3 percent.

In addition, 67 percent of those polled said their companies have significant cash and almost the same number said they would invest that cash before the end of the year, KPMG said. Seventy-three percent said they would increase capital spending over the next year, with the highest priority on new products or services and expanding factories.

In another use of that cash, almost half of those surveyed said their companies will be involved in a merger or acquisition, KPMG said.   Continued...