Carmakers will shed 80,000 jobs globally
Electrification, tariffs and trade tensions upending industry
It’s turning out to be one of the worst years ever for autoworkers across the globe amid shrinking demand and a tectonic shift in vehicle technology, with Daimler AG and Audi announcing almost 20,000 job cuts in just the past week.
All told, carmakers are eliminating more than 80,000 jobs during the coming years, according to data compiled by Bloomberg.
Although the cuts are concentrated in Germany, the U.S. and the U.K., faster-growing economies haven’t been immune and are seeing automakers scale back operations there.
The German companies joined General Motors Co., Ford Motor Co. and Nissan Motor Co. in massive retrenchments put in motion over the past year.
The auto industry is sputtering as trade tensions and tariffs raise costs and stifle investment, and as manufacturers reassess their workforce in an era of electrification, autonomous driving and ride-on-demand services. The global auto industry will produce 88.8 million cars and light trucks this year, an almost six per cent drop from a year ago, according to researcher IHS Markit.
German auto-industry lobby VDA on Wednesday predicted that the decline will continue next year, forecasting global deliveries of 78.9 million vehicles, the lowest level since 2015.
The pace of job cuts in the home of Mercedes-Benz, Porsche and BMW is expected to be “more pronounced in 2020,” VDA president Bernhard Mattes said at a news conference in Berlin, adding that the technology shift alone could lead to the loss of 70,000 jobs over the next decade.
“A fundamental structural change with enormously high investments at a time of deteriorating market dynamics — the tension is being felt at many companies,” said Mattes.
Cuts are also being carried out in China, which employs the largest number of people in the industry and has been mired in a sales slump.
Electric-vehicle startup NIO Inc., which has lost billions of dollars and watched its New York-listed shares plummet, dismissed about 20 per cent of its workforce by the end of September, shedding more than 2,000 jobs.
“The persistent slowdown in global markets will continue to dent automakers’ margins and earnings, which have already been hurt by increased R&D spending for autonomous-driving technology,” said Gillian Davis, an analyst with Bloomberg
Intelligence.
“Many automakers are now focused on cost-saving plans to prevent margin erosion.”
Being an early leader in electrification hasn’t spared Nissan, which has been in turmoil since the arrest of former chairman Carlos Ghosn a year ago.
With profits plumbing decade lows, the Japanese automaker is shedding 12,500 positions in the coming years, mostly at factories across the globe, to reduce costs as it rushes to refresh an aging model lineup.
A redesigned version of the battery-powered Leaf isn’t giving the company much of a boost this year.
The clouds started to form for U.S. carmakers last year, when Ford revealed plans for a yearslong, $11-billion restructuring.
The company has made a series of piecemeal announcements since then, slashing roughly 10 per cent of its global salaried ranks and shutting six plants: three in Russia and one apiece in the U.S., U.K. and France.
Of roughly 17,000 jobs Ford is eliminating, 12,000 will be in Europe.
The state of car-factory jobs in the U.S. is less clear, mainly thanks to the new contracts Detroit-area automakers have been negotiating for the next four years.