IDLING
Automakers Reported Flat Employment as U.S. Sales Slow
By JENNIFER BELLANTONIO
Ford Motor Co.’s decision to shift its Lincoln Mercury division back home this summer put a tiny dent in Orange County’s automobile landscape.
No. 6 Dearborn, Mich.-based Ford scaled back operations here by plucking Lincoln Mercury from the Irvine headquarters of its luxury brand Premier Automotive Group and moving it back east under the Ford mantle. Lincoln Mercury counted 150 workers last year.
The result: OC’s nine largest automakers collectively reported a 1% drop in county workers to 3,598, according to this year’s Business Journal list, which ranks companies by employees.
Lincoln Mercury’s OC exit was offset by a handful of automakers that bolstered staff, including No.1 Mitsubishi Motors North America Inc., No. 2 Hyundai Motor America Inc. and Kia Motors America Inc., and No. 8 DaimlerChrysler Motors Corp. Without Ford, automakers would have posted a 3% gain in workers.
A number of foreign-owned automakers base their U.S. operations in OC. The biggest is Japan’s Mitsubishi Motors Corp., whose North American operations are based in Cypress.
Mitsubishi led the list with 983 OC workers, up 8% from last year.
The Japanese company, which has eight OC authorized dealers and 642 in the U.S., made a slew of changes this past year, including luring Finbarr O’Neill, former chief executive of Hyundai Motor America, to lead its North American operations (see related story, page 1). O’Neill, who had been with Hyundai for 18 years, replaced Pierre Gagnon, who the company said resigned to pursue other interests.
Mitsubishi is looking to stem a recent decline in sales. The automaker’s 2003 U.S. vehicle sales were off 20.2% through August to 189,118, versus a year ago.
Not exactly like its heady growth of years past. Mitsubishi grew sales 81% from 1998 to 2002, with 2000 and 1999 showing the biggest gains of 20.3% and 37.1%, respectively. Mitsubishi sold 350,000 autos in North America last year and is projected to sell about 340,000 this year.
At No. 2 was South Korea’s Hyundai Motor Corp. and its U.S. operations: Fountain Valley-based Hyundai Motor America and Irvine-based Kia Motors America. Together they employ 827 workers in OC. (A note about Hyundai: In the past, the Business Journal has listed Hyundai and Kia separately. But, earlier this year, they fought an antitrust lawsuit on grounds that they are controlled by the same parent.)
Hyundai Motor America posted a 4% increase in workers to 571.
Hyundai’s sales growth has slowed this year, up 4% through August versus 8.3% for 2002. But they’re still beating the overall U.S. market, which is down 2.5%. Hyundai said it’s tracking to hit more than 400,000 auto sales this year.
Robert Cosmai, the automaker’s former vice president of national sales, recently took over as chief executive from O’Neill.
Chris Hosford, Hyundai spokesman, said Cosmai is planning to refine the company’s direction. Recently, Cosmai was in South Korea discussing his plans with senior management, Hosford said.
“It’s a little early to talk about (his plans),” said Hosford, who noted that changes would be “evolutionary, not revolutionary” with the company still focusing on value, quality and Hyundai’s beefy warranty.
Hyundai’s sales have been driven by the Sonata midsize sedan and Santa Fe sports utility vehicle, which will be built in Alabama beginning in 2007 at Hyundai’s first U.S. auto assembly plant. The facility is expected to produce 300,000 vehicles per year at capacity.
Earlier this year, Hyundai opened a $30 million design and technical center in Irvine, which it shares with Kia. The 90,000-square-foot facility so far houses about 100 auto designers, engineers, model makers and technicians.
Hosford said the number of workers continues to grow.
Kia also saw its OC workers increase 4% to 256 workers.
The automaker’s U.S. sales inched up 1% through August to 168,273, versus a year ago.
Peter Butterfield, Kia’s chief operating officer for the Americas region, told the Business Journal in a past interview that the automaker, which plans to launch three new autos by March, was on track to hit its growth targets.
“To get where we want to be in 2005 we need to grow somewhere between 8% and 10%,” Butterfield said.
No. 3 Irvine-based Mazda North American Operations reported a 5% decline in OC employment to 456.
At No. 4 was Toyota Motor Sales USA Inc. The automaker, which saw a 2% increase in OC workers to 440, has several units in the county, including Calty Design Research Inc. in Newport Beach and Toyota Racing Development USA Inc. in Costa Mesa.
Another foreign-owned automaker with U.S. operations based in OC is No. 5 Brea-based American Suzuki Motor Corp., which saw employment fall 1% to 332 workers.
Japan’s Suzuki, known mainly for its speedy motorcycles, is looking to aggressively grow its auto unit.
Suzuki plans to launch nine new autos in the next five years in a bid to triple sales by 2007.
Suzuki sold 41,658 autos through August this year, down 6% versus last year. It started selling autos in the U.S. in 1985 but has remained a relatively small player here.
The automaker is looking to get on the radar of buyers with a new $40 million ad campaign promoting its Verona midsize car and its compact Forenza.
At No. 6 was Ford Motor Co., with 312 OC workers, down 32% from a year ago.
As noted earlier, the drop is mainly due to Ford shifting its Lincoln Mercury division back to Michigan.
Nearly half of the full-time Lincoln Mercury workers, mostly in sales and marketing, made the trek back to the Motor City. Others shifted to different Ford divisions or left the company and landed at competitors.
Premier Automotive Group features Ford’s luxury brands: Jaguar, Aston-Martin, Land Rover and Volvo.
The unit has been a bright spot in Ford’s overall performance. In the second quarter, the group reported pretax earnings of $166 million, versus a loss of $122 million a year ago.
No. 7 Gardena-based Nissan North America Inc., which runs a sales and marketing office in Costa Mesa with 133 workers, and No. 9 Porsche Engineering Services Inc., which has 25 employees, reported no staff changes.
DaimlerChrysler Motors saw a 13% increase in workers to 90.
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