Mubasher: Amid a slowdown in global auto sales following a decade of growth, car manufacturers are bracing for a harder blow by scaling back their payrolls
Auto giants in a range of countries, including China, the US, Canada, the UK, and Germany announced at least 38,000 layoffs over the past six months, according to Bloomberg News.
The beginning came with General Motors’ (GM) announcement last November that it will lay off 14,000 salaried and blue-collar workers as it plans to close five factories in North America.
Moreover, last January, Jaguar Land Rover (JLR) announced its plans to remove around 4,500 staff worldwide, the majority of which are located in the UK, citing a slow sales growth due to the Brexit uncertainty and faltering demand for diesel-fuelled vehicles and a sales slump in China.
In the same month Japan’s Nissan also announced 700 job cuts as it was planning to scale back production of vans and pickup vehicles at Mississippi operations. Last week, the automaker announced 4,500 layoffs worldwide as the company’s CEO Hiroto Saikawa cited a “rock-bottom” performance.
Electric car giant Tesla also said that it would trim 3,000 staff or 7% of its workforce, while it announced another round of sales staff cuts in April.
Most notably, last April, auto behemoth Daimler was reportedly weighing cutting off 10,000 jobs in Germany.
Daimler’s CEO Dieter Zetsche on Wednesday warned against an upheaval within the auto industry, with sweeping cost reductions ahead.
Ford announced earlier this week that it would slash 10% of its global white-collar workforce, or about 7,000 positions.
“The industry is right now staring down the barrel of what we think is going to be a significant downturn,” Bank of America Merrill Lynch (BAML) analyst John Murphy was quoted by Bloomberg as saying,
Moreover, the pace of sales drop in China came as “a real surprise,” Murphy said.
It is worth noting that auto sales in China, the world’s biggest car market, posted a drop in 2018 for the first time in 20 years, falling by 6% to 22.7 million vehicles.
The downturn could be further exacerbated with US threats of higher tariffs, which an industry group warned that it could put 700,000 US jobs at risk.
