Automakers' Job Cuts Are at 38,000 and Counting
Carmakers are cutting shifts or closing factories altogether across the globe, but the culling goes beyond that.
(Bloomberg) -- As global auto sales slow after a decade of growth, carmakers are girding for a deeper downturn by slashing payrolls.
From China to the U.K., Germany, Canada and the U.S., companies have announced at least 38,000 job cuts in the past six months.
It may be just a beginning: Daimler AG’s departing chief executive officer, Dieter Zetsche, on Wednesday warned sweeping cost reductions are ahead to prepare for unprecedented industry upheaval.
“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 analyst John Murphy said at a forum in Detroit on Tuesday, adding that the pace of decline in China “is a real surprise.”
Carmakers are cutting shifts or closing factories altogether across the globe, but the culling goes beyond that. Several recent rounds also target salaried workers, reflecting sluggish sales in the world’s two largest auto markets -- China and the U.S. -- and the pivot auto companies are making toward a future of electric and self-driving vehicles. Ford Motor Co. said Monday it will eliminate 7,000 jobs, or 10% of its white-collar workforce worldwide.
The downturn could be exacerbated by higher tariffs threatened by the U.S., which a trade group representing a dozen of the largest domestic and foreign carmakers warned could put 700,000 American jobs at risk. Toyota Motor Corp. and the Japanese car industry condemned the possible levies in strongly worded statements in recent days.
Here’s a rundown of major job reductions announced or reported in the past six months:
| Company | Announce | Total | Where | Read More |
|---|---|---|---|---|
| Ford | May 20 | 7,000 | Global | 10% of the global white-collar workforce |
| Nissan | May 15 | 4,500 | Global | CEO said had hit “rock bottom” |
| Honda | May 13 | 3,500 | U.K. | Closing factory in 2021 after consulting with unions, government |
| Daimler | April 18 | *10,000 | Germany | According to a report by Manager Magazin |
| Tesla | April 8 | N/A | U.S. | Another round of sales staff cuts |
| Fiat | Mar. 29 | 1,500 | Canada | Factory is scaling back minivan production |
| Ford | Mar. 15 | **5,000 | Germany, U.K. | More than 5,000 in Germany and unspecified number in the U.K. |
| Ford’s China JV | Feb. 27 | **N/A | China | Thousands of the JV’s 20,000 workforce, according to a New York Times report |
| Audi | Feb. 20 | *N/A | Germany | 10% of management, according to CEO interview with Handelsblatt |
| Tesla | Jan. 18 | 3,000 | U.S. | 7% of the workforce |
| Nissan | Jan. 17 | 700 | U.S. | Trimming pickup and van output at Mississippi plant |
| Jaguar Land Rover | Jan. 10 | 4,500 | Global | Spurred by a sales slowdown caused by Brexit, flagging demand for diesel-powered vehicles and a downturn in China |
| General Motors | Nov. 26 | 14,000 | Global | The cuts include several factory closings in North America |
*According to reports
**Note: Some of the Ford job cuts reported in February and March are included in the company’s salaried reductions announced in May.
“Auto companies globally are contemplating life where global production has greater downside risk than upside,” Morgan Stanley analyst Adam Jonas wrote in a report Tuesday. He said the chopping may not be over for Ford, estimating a 5% decline in revenue will require another 23,000 reduction in salaried jobs, assuming no other costs are pared back.
Global light vehicle sales fell 0.5% in 2018 to 94.8 million, which LMC Automotive said marked the first annual drop in global sales since 2009. Morgan Stanley projected in January another 0.3% drop this year, but a faster-than-expected deceleration in the Chinese market may have a more negative impact on sales.
“Everything is under scrutiny,” Daimler’s longtime CEO Zetsche said as a farewell at an annual meeting in Berlin Wednesday.
To contact the reporters on this story: Cécile Daurat in Wilmington at cdaurat@bloomberg.net;Chester Dawson in Southfield at cdawson54@bloomberg.net
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Cécile Daurat, Kevin Miller
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