Global Auto Inc announces over 37,000 jobs cut in first three months of 2019
New Delhi: Marred by reverse globalization, emission scandals, consolidation and electrification, Auto Inc has announced over 37,000 jobs cut in the first three months (Jan- March) of 2019, according to an ETAuto research.
Amidst declining auto sales led by global trade war and Brexit, along with electrification drive, auto majors like General Motors, Ford, and Volkswagen took the lead in terms of jobs cut.
General Motors, the largest US automaker handed pink slips to about 4,000 salaried workers in the US and Canada early this year. The retrenchment was part of 15,000 jobs cut announced by the company in November 2018. The company will also end production at five North American plants, thus making it the 7th largest job cuts announced by automakers since 2001.
As collateral damage, world second largest auto component maker, Magna International Inc also retrenched 120 people at its Lordstown Seating Systems plant that makes seats for GM vehicles.
Last month, the emission scandal hit German automobile giant Volkswagen also announced plans to axe 7,000 jobs by 2023 as the company gears up to accelerate its transition to electric vehicles.
Many conventional automakers are laying off people due to transition to EV space, however, already established electric vehicle makers are also not unaffected from the trend as prominent EV maker Tesla also announced 3,000 jobs cut in the US due to mounting pressure on the Elon Musk led company.
Elon Musk, Co-Founder, Tesla had said that they need to reduce global headcount by 7 per cent. The maker of most popular EV is also looking to go on direct sales thus closing down its dealerships across the country.
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Other major reason for the layoff has been restructuring. Another US carmaker, Ford recently announced 5,000 jobs cut in Germany as a part of a major restructuring to boost profitability at its European operations. The European division has been going through losses and jobs cut was a step to revamp their business, the company claimed. Ford employs around 53,000 people across Europe, and 24,000 of them are in Germany.
Ford is also reducing the number of employees by 2,000 in China where it has a joint venture with state-owned Changan Automobile Group. The decision came after growing stress on the auto sector globally.
Korean automobile major Hyundai Motor announced 1,500 jobs cut in China in January as Hyundai saw a dip of 23 per cent in sales for 2018 at Beijing plant.
In continuation with the trend, Japanese car maker Honda is set to close its only British car plant by 2022 where 3,500 jobs will be lost. It will be Hyundai’s second plant closure scheduled for 2022, another being in Japan. According to the company the decision came in an effort to focus on new vehicle technologies.
Tata Motors owned Jaguar Land Rover also announced 4,500 jobs loss worldwide fearing Brexit impact and weakening demand in its key market –China. This layoff represents 10 per cent of JLR’s total workforce. The company reasoning the move said jobs cut is part of its move to boost cash flow and cost reduction.
Another auto giant, Fiat Chrysler Automobiles (FCA) has also recently cut about 1,500 jobs at its factory in Windsor, Canada, which accounted around a quarter of its local workforce.
Auto components maker Schaeffler plans to cut 900 jobs and shut plants to reduce product range in Germany. Schaeffler’s 2018 earnings slumped due to weak demand in Europe and China. German automotive cable and wiring system specialist Leoni will axe about 2,000 jobs part of a restructuring plan. World largest auto parts maker, Bosch Gmbh is also allegedly removing 600 jobs in Germany; however, the company has not yet confirmed any number.