Companies & Industries

Third Shifts Return to the U.S. Auto Industry


Venus Walker gets her two teenage kids settled in each night and then heads to her job at General Motors’ (GM) metal-stamping plant in Lordstown, Ohio, about 60 miles southeast of Cleveland. She gets home in time to see them off to school. Walker, 51, is one of thousands of autoworkers in the U.S. benefiting from the return of a third shift at factories—often from 11 p.m. to 7 a.m. For the first time since the car industry’s collapse in 2009, many plants are running 24 hours a day. At the nadir, some plants ran only one eight-hour shift. U.S. auto plants this year may operate at about 81 percent capacity after falling as low as 49 percent in 2009, according to estimates from researcher IHS Automotive.

The new third shifts, adding more than 4,300 jobs in four states for GM alone, increase payroll-tax revenue and demand at odd hours for everything from day care and dentistry to food and financial services. “I like the third shift because it’s flexible,” explains Walker, whose 10:30 p.m. to 6:30 a.m. work hours give her plenty of time to attend her 14-year-old daughter’s quiz bowl competitions or her 16-year-old son’s track meets. She also can handle daytime errands or make a run to the dentist—if she’s willing to sacrifice sleep.

Automakers are increasing production at car plants after U.S. light vehicle sales rose at least 10 percent for two straight years for the first time since 1984 and grew at a faster rate than China’s sales for the first time in at least 13 years. States that were hit hard by the downturn, such as Michigan and Ohio, are among the biggest beneficiaries.

Since GM and Chrysler emerged from bankruptcy in the middle of 2009, GM, Ford Motor (F), Chrysler Group, Nissan Motor (NSANY), and Kia Motors have either added U.S. production beyond the traditional two shifts or announced plans to do so at 16 plants, including six in Michigan. “There’s no question we’re running full-out,” says Kim Rodriguez, a principal at KPMG’s auto consulting business in Detroit. “After China, the U.S. was the market where executives expect the most growth, which is staggering considering where we were.” Businesses from auto suppliers to trucking companies are hustling to add capacity and find new workers to handle the increased production, she says.

For divorced mom Bobbi Marsh, who until recently worked on the third shift at GM’s Lordstown auto manufacturing complex, the late-night hours meant more off-hour grocery trips to the 24-hour Giant Eagle supermarket and late-night orders from Ross’ Eatery & Pub, which gets 75 percent of its restaurant business from the three shifts at the Lordstown plants. The restaurant now runs from 6 a.m. to 1 a.m. to accommodate the new shift, expanding last year from 8 a.m. to 11 p.m. “We had been treading water for what seemed like an eternity—it was just me, my mom, and my aunt running the place” during the auto crisis, says owner Earl Ross. He now employs 20 people to supply the plant’s workers with fried chicken, burgers, and his signature $6.99 Philly steak sandwich.

At the new Barrel of Monkeys Childcare & Preschool Center in Austintown, Ohio, children often watch cartoons or have an evening snack before brushing their teeth and drifting off to sleep for the night on a cot, says co-founder Melissa Bohr. In the morning their parents pick them up or they catch the bus to school. “We try to make it as comfortable and as familiar as possible for them,” says Bohr, who started the day-care center in November with her brother, partly in anticipation of increased demand due to a new third shift added at GM’s Lordstown complex about 10 miles away. “We knew there was going to be a need for this.” Bohr says her 5,200-square-foot facility already serves about 100 children spread mostly across days and afternoons, and her overnight shift will likely grow as the year progresses now that the GM factory is building Chevrolet Cruze sedans 24 hours a day. “We’ve definitely seen an uptick in traffic and business around here since the shift was added,” says Bohr.

The 20 new jobs Bohr says she has created so far at Barrel of Monkeys aren’t an anomaly. A third shift at a Midwestern U.S. auto plant typically requires about 1,000 autoworkers and creates about 7,850 spinoff jobs ranging from police and fire workers to construction, retail, and restaurant employees, according to estimates from the Center for Automotive Research in Ann Arbor, Mich. About one-third of the ancillary positions are within 60 miles of the plant, with others at farther-away suppliers and service providers.

The overnight shift at GM’s sport-utility vehicle factory in Delta Township, Mich., near Lansing, has meant a 40 percent increase in business at Tony M’s restaurant nearby, says Stefan Farrell, general manager at the eatery, which specializes in pizza and lasagna. The restaurant has expanded business hours to 7 a.m. to 2 a.m. daily from its 11 a.m. to 10 p.m. workday before the third shift was added at the SUV plant in 2010, he says. About 15 workers who drive trucks delivering parts to the plant were eating nearby as he talked. “When GM is down, it’s a ghost town,” says Farrell.

Rather than running round-the-clock into a full third shift, Chrysler and Ford are adding so-called third crews, which rotate in groups of additional workers during less-busy times of the day and evening and on weekends to allow the plants to operate more hours weekly. Ford will have four plants in Kentucky, Michigan, and Illinois on the three-crew system within the next year, meaning those plants will run about 120 hours out of the 168 possible, instead of the 100 hours for a two-shift run. Chrysler’s Jeep Grand Cherokee plant in Detroit will add a similar system next year.

Plants outside of what is traditionally considered auto country are also adding third shifts. Nissan already runs three shifts on the Altima sedan assembly line at its Canton (Miss.) factory, says Bill Krueger, vice-chairman of Nissan Americas’ operations. The automaker also is studying a third shift at its largest North American plant, in Smyrna, Tenn. “It’s in our future,” Krueger says. Auto suppliers nearby are talking about adding third shifts of their own in Rutherford County, Tenn., home to Nissan’s Smyrna plant and about a 75-minute drive from Volkswagen’s Chattanooga factory, says Holly Sears, vice-president for economic development for the Rutherford County Chamber of Commerce. “Every single auto supplier we’ve talked to recently has a positive outlook for 2012 and 2013,” she says.

West Point, Ga., with about 3,500 residents, has seen new hours at dentists’ offices, banks, health clubs, and other businesses since the local Kia factory added a third shift last June, says Randy Jackson, vice-president for human resources at the 3,000- employee operation. Nellie’s Day Care in West Point has added 8 to 10 kids who spend the night, mostly the children of Kia employees, says Bo Barber, who took over operating the 24-year-old business from his mother, Nellie, about five years ago. A year ago they had no overnight guests. The overnight business required an additional worker for the day-care center, which serves about 46 children on three shifts with six employees, Barber says.

“Third shifts are beginning to sprout up in a lot of places now,” says Jackson, who has worked at U.S. auto factories for 31 years. “Businesses are expanding here, and it’s helping the community.”

The bottom line: As U.S. auto manufacturing rebounds, third shifts have been added to 16 plants. There’s a ripple effect for local jobs.

Green is Detroit bureau chief for Bloomberg News.

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