Chrysler LLC's decision to close its California-based Pacifica design studio is the latest indicator demand for design jobs in North America is dwindling, an industry insider says.
“The market is shrinking dramatically,” says Bill Barranco, principal of Autovision Inc., an executive recruitment firm that serves automotive designers and design studios.
“Ford (Motor Co.'s) not hiring anybody. (General Motors Corp.) doesn't need any more people. If anything, they're hiring for (South) Korea or Australia or Germany. Chrysler obviously is not hiring. CALTY (Toyota Motor Corp.'s operation) needs one or two people in Michigan.”
Hyundai Motor America Inc.-Kia Motors America Inc. also isn't hiring, he adds. “And Nissan (Motor Co. Ltd.) is laying off designers.”
The chill comes as U.S. sales suffer against a backdrop of recession-like conditions such as sagging consumer confidence, a weakening greenback and malaise from the sub-prime lending fiasco.
Meanwhile, even as the design community derides the move as shortsighted, Chrysler defends its decision.
“This is really all about consolidating our business so that we're the right size,” says Chrysler spokeswoman Dianna Gutierrez.
The auto maker's Pacifica Advance Product Design Center in Carlsbad, CA, is the spiritual home of acclaimed cars such as the Chrysler 300 sedan and Dodge Challenger muscle coupe, set for production this year as a limited-edition '08 high-performance model.
“We're not eliminating (Pacifica's) advanced-design function,” Gutierrez says. “We're relocating it.”
An undetermined number of the studio's 20 employees will be offered positions at Chrysler's design headquarters in Auburn Hills, MI.
But pulling up roots in car-crazy California, birthplace of sweeping trends and insightful innovations, is “regressive,” warns Imre Molnar, dean of Detroit-based College for Creative Studies, a world-renowned automotive design school.
“This is purely a bean-counter exercise,” Molnar says. “Chrysler is indicating they're not thinking about a future. They're thinking about next year's balance sheet.”
Says Geoff Wardle of Pasadena, CA-based Art College of Design: “The forward thinking of automobiles and personal transportation is still here in Southern California. If the main car manufacturers want to turn their backs and ignore what's going on, this is at their peril.”
It is “no accident” that trend-setting enterprises such as supercar manufacturer Fisker Coachbuild LLC and electric-car maker Tesla Motors Inc. have chosen California as their home base, Wardle says.
“The cost of running a design facility or an advanced-thinking facility out here, in the long run, has got to be fairly marginal compared to the operating costs of a total car company,” he claims.
“Sure, you can fly into California, take a look around for a few weeks, make some notes and go back. But you don't really find out what's going on and how people actually think out here in a short period of time.”
The flattened growth curve observed by Barranco follows a flurry of activity in recent years. Last year, the Kia and Acura brands each were beneficiaries of design studios independent of their respective big-brother operations, Hyundai and American Honda Motor Co. Inc.
These moves brought to 16 the number of major design studios in California.
“The reason they've set up is because they need to have that cultural influence,” says Barranco, who also has worked as a designer. “You have to have the initial spark of ideas. And that's the point of having something (in California).”
Pervasive style trends such as oversized wheels became de rigueur in California before catching on anywhere else.
“People in New York are not car-culture conscious,” Barranco adds. “If they have to have a car, they go buy a car. People in California have cars because they want them.”
But Gutierrez says Chrysler is expanding its focus, not retrenching.
“We really have to think globally now,” she says. “Design leadership isn't just about a California presence. It's having a finger on the global pulse.”
Chrysler Chairman and CEO Robert Nardelli has said there will be design components in the centers of engineering excellence the auto maker has planned for regions such as Asia.
But Barranco is suspicious of an organization that does not allow designers to create with complete freedom.
“There's a tradition that engineers want to control designers,” he says. “That's the old-fashioned way, coming straight out of the last century. You're not going to get advanced design as long as you've got engineers looking over their shoulders.
“Engineers hate to admit that,” Barranco adds. “Most of them don't even believe that's true.”
As a side effect of any shift away from California, auto makers can expect more trouble attracting and retaining top design talent.
“The Detroit-based car companies are really fabulous at hiring entry-level talent,” Molnar says. “But they're absolutely appalling at keeping them current, making sure that they stay on the cutting edge.”
California affords such an opportunity. However, when designers are based in Detroit, auto makers “tend to lock them up,” he says.
Molnar does not go so far as to say design success is linked directly to Southern California studios. But maintaining a presence there is “enormously advantageous.”
“For one thing, it's a huge market,” he says. “And it's a completely different market from anything in Detroit or the Midwest or even the East Coast.”
Molnar reminds that GM closed its California design studio in 1996, only to reopen one four years later.
GM says several factors prompted the reversal.
Says Molnar: “They realized the error of their ways.”
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