Car Manufacturers Will Fire 80,000 Employees, Globally; Rise Of Electric Cars Is The Reason?
It seems to be the worst year for autoworkers across the globe, the shrinking demand and a tectonic shift in-vehicle technology, with Daimler AG and Audi announcement of over 20,000 job cuts in the past week.
How Did This Happen?
According to Bloomberg News, the carmakers will be eliminating more than 80,000 jobs in the coming years.
However these elimination mostly be affecting Germany, the U.S. and the U.K., but developing countries can not be immuned and are seeing automakers scale back operations there.
How Is China Industry Get Affected By This Decline?
General Motors Co., Ford Motor Co. and Nissan Motor Co. also joined by the German companies in massive retrenchments during the past year.
according to researcher IHS Markit, the global auto industry will produce 88.8 million cars and light trucks this year, an almost 6% less from a year ago.
The decline is also affecting China, which records the largest no of employs in this domain.
NIO Inc., the Electric-vehicle startup has lost billions of dollars and its New York-listed shares plummet, dismissed about 20% of its workforce by the end of September, shedding more than 2,000 jobs.
How Is Japanese An Germany Industry Get Affected?
The Japanese automaker is also 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.
Audi announced that it will eliminate as many as 9,500 positions in Germany through 2025 as parent Volkswagen AG prepares for a costly transition to electric vehicles. Daimler announced plans to shed more than 10,000 worldwide.
In Germany alone, when including local operations of foreign manufacturers, about 150,000 jobs might be at risk in coming years, according to estimates by the Center of Automotive Management, near Cologne.
What Does The Future Hold For This Industry?
Gillian Davis, an analyst with Bloomberg Intelligence said “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,”.
He added, “Many automakers are now focused on cost-saving plans to prevent margin erosion,”. (Reference)
How Did It Start?
Last year, the clouds started to form for U.S. carmakers, when Ford revealed plans for a years-long, $11 billion restructuring.
They have made a series of piecemeal announcements since then, slashing roughly 10% of its global salaried ranks and shutting six plants: three in Russia and one apiece in the US, UK and France
Around 17,000 jobs will be eliminated by Ford, out of that 12,000 will be in Europe.