Automakers are pushing factories and workers to the limit to try to meet burgeoning demand for new vehicles.
Some plants are adding third work shifts. Others are piling on worker overtime and six-day weeks. Ford Motor and Chrysler Group are cutting out or reducing the annual two-week July shutdown at several plants this summer to add thousands of vehicles to their output.
“We have many plants working at maximum capacity now,” says Ford spokeswoman Marcey Evans. “We’re building as many (cars) as we can.”
The auto recovery is a bright spot in the slow economic comeback, and President Obama has made it a cornerstone of his re-election campaign, saying his team saved Chrysler and General Motors with the government-run bankruptcies it says were the only alternative to collapse.
Republican rival Mitt Romney says the auto companies could have gone through a more normal bankruptcy, with government loan guarantees only part of the process.
The automakers’ problem now is one they welcome:
It’s hot demand. Sales for 2012 are estimated at 14.3 million vehicles, according to IHS Automotive, up from 12.8 million last year.
Since the boom years when the industry made about 16 million vehicles a year, automakers have slimmed down for the new reality. They have no excess capacity but don’t want to open new plants and risk having to repeat the recent painful and expensive closings if demand falters. They vow never again to have too many factories making too many cars that then required huge sales incentives to move.
As demand rises, they push existing plants and workers harder. “Some of the folks are working 60 hours a week, week after week,” says Kim Hill, director of economic development strategies for the Center for Automotive Research.”When do you back up against a wall and you can’t run your workers any longer?”
Not eager to find out, some carmakers are hiring:
- Chrysler Group. The Detroit plant making the Jeep Grand Cherokee is working overtime five days a week and many Saturdays. “That’s extra money in their pocket, but (there’s) a toll it’s taking on the workers,” says spokeswoman Jodi Tinson. Chrysler is adding 1,100 jobs on a third shift to ease the problem. It also just added 1,800 workers in Belvidere, Ill., to make the new Dodge Dart.
- Volkswagen. Adding 800 workers will allow VW’s Chattanooga, Tenn., plant to run 20 hours a day, six days a week making Passat sedans
- Hyundai. A new third shift of 877 is being added at its Montgomery, Ala., plant.
- Toyota. More than 1,000 jobs are being added at five U.S. plants. Most plants already are using overtime and Saturdays. “In most of our plants, we’re maxed out,” says Toyota spokesman Mike Goss.
Salesforce.com Inc. Salesforce.com Inc. Latest from The Business Journals Salesforce sees up to 10,000 workers in SFSalesforce suspends plans for huge San Francisco campusSalesforce yearly earnings up 37 percent Follow this company (NYSE: CRM) has suspended development of its proposed 14-acre Mission Bay campus, saying it needs space faster than it could build it and thus will focus its efforts on expanding into existing buildings in downtown San Francisco.
“We just took a look at our long term and really our short term needs. The reality is we are going to need the square-footage before we can build it,” said Bruce Francis, Salesforce vice president of corporate strategy. “We came to the conclusion this is the way to go.”
The decision to change direction comes nearly two months after Salesforce made headlines by signing a massive downtown office lease, but it appeared to have come abruptly, taking the mayor’s office by surprise. Salesforce had reiterated that it was committed to the Mission Bay campus, company officials were working with contractors in recent days and the company had been expected to come to the city planning commission on Thursday seeking extra office allotments.
Officials with Mayor Ed Lee’s office said Monday evening that the mayor still believes Salesforce “is very committed to San Francisco,” and that he is “committed to working with them” on their San Francisco needs, whether at Mission Bay or elsewhere in the city.
“We have a really great relationship with Salesforce,” said Tony Winnicker, a special advisor to the mayor. “They’re a great San Francisco company.”
Salesforce had unveiled designs for a Mission Bay campus that would include four buildings, designed by Legorreta Legorreta, containing 1.2 million square feet of office space, 50,000 square feet of retail, 22,000 square feet of child care, and 900 parking spaces. The quartet of structures, on which construction was expected to begin in 2013 with completion in 2015, featured bold hues of purple, pink, yellow, and olive. Eventually, Salesforce had said it could expand the campus to up to 2 million square feet, enough space for 8,000 employees.
There are no immediate plans for what to do with the Mission Bay land that Salesforce bought for $278 million in November 2010.
Salesforce said Monday its growth has been faster than anticipated a year ago, with 500 more employees hired locally in 2011 than forecast, bringing the company’s headcount in San Francisco to more than 3,000 employees.
The company said it expects to have 5,000 employees downtown in the next few years, and it plans to continue hiring more aggressively both in San Francisco and around the globe.
Salesforce’s options for replicating the square footage of the campus in downtown San Francisco appear limited, however.
In early January, Salesforce surprised many by announcing it had signed an 18 year lease for 400,000 square feet of additional space in downtown San Francisco - which Mayor Ed Lee said was the largest long term lease in the city in more than a decade. Company officials at the time said they remained committed to building the Mission Bay campus and retaining other existing facilities.
The $339 million lease at 50 Fremont St. expanded Salesforce’s downtown campus by 50 percent. The company can start occupying parts of the building April 1.
As part of the deal, Salesforce gets a chance to buy the 42 story, 800,000 square foot building between Dec. 1, 2017 and Nov. 30, 2018, and a right of first refusal on offers to buy the building throughout the term of the lease.
The deal also includes provisions for two 5 year extensions and the right to lease additional 100,562 square feet that must be exercised by Dec. 15. It is structured to make parts of the building available in stages.
Salesforce already had leases in downtown San Francisco at One Market Street, One California Street, 123 Mission Street and 333 Main Street in addition to 50 Fremont Street.
Salesforce last week exceeded analysts’ expectations with a record $2.27 billion in annual revenue.
It purchased multiple companies and added nearly 2,500 employees during the fiscal year ended Jan. 31., including nearly 2,000 in the United States.
It posted a net loss for the quarter and the year of $4.1million and $12.1 million, respectively. The company said it expects to revenue to hit $3 billion and for it to continue to be in the red by as much as $26.2 million on a GAAP basis through the rest of the current fiscal year.Patrick Hoge covers technology for the San Francisco Business Times.
Amazon’s Plans for Towers May Swell Seattle Market by 7%February 17, 2012, 10:18 AM EST
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By Hui-yong Yu
(Updates with Amazon sales in last paragraph.)
Feb. 17 (Bloomberg) — Amazon.com Inc. plans to build three commercial towers in Seattle, potentially increasing the city’s downtown office space by 7 percent, based on the company’s preliminary development plans and figures from CBRE Group Inc.
The largest Internet retailer, based in Seattle, agreed to buy three contiguous blocks from Clise Properties Inc. and has options to buy additional “significant” sites nearby, said Chairman Al Clise, the fourth-generation head of the family- owned developer. He declined to disclose terms of the sale, scheduled to be completed later this year. It would be Amazon’s first land purchase.
“Amazon wants to plan for their future,” Clise said in a telephone interview yesterday. “The amount of new jobs and infrastructure and economic development this will provide is just amazing.”
Seattle’s downtown office market of 42.7 million square feet (3.97 million square meters) is “one of the strongest- performing” in the U.S., CBRE said in a fourth-quarter report. Office landlords had a net gain in occupied space for the seventh straight quarter, fueled by technology companies such as Amazon, according to the brokerage firm. Vacancies in the South Lake Union submarket, where Amazon is based, fell to 9 percent, compared with almost 18 percent for downtown Seattle as a whole.
“Developer confidence is building, with over 17 million square feet of office space in the planning stage,” CBRE said in the report, which didn’t account for the Amazon plans.
The company’s three towers would have as much as 3 million square feet of space, according to preliminary documents filed Feb. 15 with the city’s Department of Planning and Development.
The retailer’s property consultant, Seattle-based Seneca Real Estate Group Inc., filed the paperwork yesterday to begin the process of obtaining permits for three buildings of about 1 million square feet each, at 2001, 2100, and 2101 Seventh Ave., according to the planning department’s website.
The land is zoned for office buildings as high as 500 feet (152 meters), or about 40 stories, according to the department.
Michele Glisson, an Amazon spokeswoman, declined to comment.
The property in the Amazon deal, now mainly occupied by low-rise buildings and parking lots, is part of a 12.5-acre (5 hectare) parcel that Clise put up for sale in 2007, hoping to attract $600 million. The credit crisis prompted the company to take it off the market in April 2008. Clise wanted to sell to one buyer in hopes of spurring a unified development on the property, said Al Clise, whose family has owned some of the land since the early 1900s.
“We always thought a master-plan corporate headquarters, world-class type of development, is what needed to happen,” he said. “If it didn’t, we felt it would be a lost opportunity.”
Clise Properties’ triangular parcel is located just north of Seattle’s central business district and immediately south of South Lake Union, the neighborhood where Amazon moved its headquarters in 2010. The land is bordered by Denny Way, Westlake Avenue and Fifth Avenue.
The company leased 4.3 million square feet of offices as of Dec. 31, and an additional 44.1 million square feet of warehouse space, data centers and related facilities, according to its annual report.
Amazon employed about 56,200 people, including part-time workers, as of Dec. 31, up from 20,700 employees at the end of 2008 and 7,500 a decade ago, according to company filings with the U.S. Securities and Exchange Commission.
Amazon surpassed Samsung Electronics Co. as the No. 2 seller of tablet computers in the last quarter, shipping 3.89 million units, according to research firm IHS Inc.
—Editors: Christine Maurus, Daniel Taub
## -0- Feb/17/2012 07:31 GMT
To contact the reporter on this story: Hui-yong Yu in Seattle at email@example.com
To contact the editor responsible for this story: Daniel Taub at firstname.lastname@example.org