By on December 4, 2019

fairfax line assembly factory general motors, Image: General Motors

With environmentalism sweeping through the automotive industry of late, manufacturers are spending oodles of cash to fund the continued development of electric vehicles. Unfortunately, the are doing this during a period where the developed world’s taste for cars has already reached its zenith — or so it seems. Growth is slowing in markets across the globe and cuts have to be made somewhere if the industry players want to keep their bottom line positioned firmly in the black.

A recent report from Bloomberg, estimated that around 80,000 auto jobs will be eliminated in the coming years as a result of electrification — with the majority concentrated in the United States, Germany, and United Kingdom. Though the onslaught  of cuts will not be limited to the developed world, nor entirely the fault of EVs. 

Last week, Daimler announced it would have to sacrifice at least 10,000 jobs (10 percent of which will be related to management) so it could save roughly $1.5 billion over the next three years. “The automotive industry is in the middle of the biggest transformation in its history,” the company stated in its announcement. “The development towards CO2-neutral mobility requires large investments, which is why Daimler announced in the middle of November that it would launch a programme [sic] to increase competitiveness, innovation and investment strength.”

A day earlier, Audi did the same — saying it would need to cut 9,500 jobs by 2025 (about 10 percent of its global workforce). On the upside, it wagered it could create 2,000 via new technologies. But that still works out to a net loss of 7,500 employees.

Domestic manufacturers, that have begun pivoting to electric vehicles while investing billions into expansive mobility projects, are also suffering. Both Ford and General Motors have said they would be eliminating thousands of jobs. GM’s restructuring plan, announced in November of 2018, will ultimately shrink its North American work force by 15 percent. Meanwhile, Ford is looking at dumping 10 percent of its global staff to help it brace for the future — with at least 12,000 positions being lost in Europe alone.

Line workers are already fearful of automation, but the prospect of manufacturers adding more electric vehicles to their lineup is adding to those concerns. EVs typically need fewer parts than internal-combustion models, often requiring less hands to cobble together. The issue was even touched upon in the Trump administration’s plan to scale back existing emission requirements, suggesting that pushing electrification would risk American jobs. While that seems to be a valid concern, it’s not the only reason for the sweeping cuts. Many markets simply appear to have plateaued — and not just in the West.

From Bloomberg:

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 [percent] 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, which debuted later than planned because of the loss of the company’s longtime leader, isn’t giving the company much of a boost this year.

China’s issues are a bit more complicated, however. The PRC funded countless EV startups in a blanket approach to gain a strong lead on the burgeoning EV industry. Nobody expected all of them to stand the test of time. But the country has also implemented rolling emission laws that has frightened away consumers unsure as to the legality of older vehicles. China’s trade war with the United States has further complicated things while raising manufacturing and shipping costs around the globe.

Regardless of how multifaceted the reasons for the widespread staff reductions may be, workers are deeply unhappy and have been voicing their distaste. This year’s labor negotiations with General Motors resulted in a 40 day strike (the longest in decades). On November 22nd, around 15,000 people marched in Germany to protest job cuts in Stuttgart. Germany’s ludicrously powerful labor union, IG Metall, has even suggested that positions are being eliminated so automakers can boost profits and are just using the pricy transition to EVs as an excuse.

That will be difficult to prove, even if the accusations are true. But union leadership has claimed all people need to do for evidence is look to the reasons automakers are giving for staff reductions. For an example of what they’re referencing, let’s go back to the start of this year when General Motors explained the modus operandi for its vast restructuring efforts.

“These actions are necessary to secure the future of the company, including preserving thousands of jobs in the U.S. and globally,” GM spokesman Pat Morrissey said. “We are taking action now while the overall economy and job market are strong, increasing the ability of impacted employees to continue to advance in their careers, should they choose to do so.”

Other automakers have issued similar statements, often suggesting it’s better to slash jobs now than wait until the industry is in a worse spot or laid-off employees find themselves in the midst of a brutal recession. But it doesn’t change the fact the industry is hemorrhaging jobs and people are demanding answers, if not a satisfactory solution to the growing employment problem.

[Image: General Motors]

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41 Comments on “Auto Industry Eliminating Jobs to Support Electric Vehicle Tech: Report...”


  • avatar
    2manycars

    Electric cars are overpriced and have serious drawbacks for a lot of people. There is no legitimate reason to be pushing them. In the instant case regarding employment, the answer is simple: just say no to electrics. Problem solved. (I’ll certainly never buy one.)

    • 0 avatar
      highdesertcat

      I read this article in its entirety last night, and it is not as simple as “just say no to electrics. Problem solved.”

      There will come a time within the next 5 – 10 years where our choices of passenger ICE vehicles will be severely curtailed. Some say limited.

      Cutting back slow-selling ICE sedans now is one small step and adding electric motors to remaining ICE vehicles, including pickup trucks, is only the beginning. But it is happening now. And it is going to cost us dearly at buying time.

      There will always be pure ICE vehicles like HD pickup trucks, but far fewer of them and the handwriting is now on the wall: the number of ICE vehicles available to the public will be dwindling.

      While I had considered buying a Rivian pickup truck, when it became available and if it was financially reachable, there really is no substitute for a good old 4-door gas V8 or diesel-fired pickup truck; the best all-around vehicle on the planet, bar none.

      I may have to reconsider my options when I get ready to buy again.

    • 0 avatar
      forward_look

      EVs have serious advantages to a lot of people. Maybe, like me, they are driving 11 year old cars waiting for range to go up and prices to come down, which they are doing.

    • 0 avatar
      mcs

      ” There is no legitimate reason to be pushing them. ”
      They do work well for many people. I’m one of them. 93k miles in 5 years with washer fluid, wipers, a set of tires, and (if I remember correctly) a $69 12v battery. More than half the electricity used was probably at no cost to me. I also have cheap power. Another savings was time since I avoid 230+ gas station stops which at 5 minutes each would add up to 19 hours standing next to the car pumping fuel. I have a newer tech battery and it’s holding up well and the car hasn’t lost noticeable range. It still has all of its range bars.

      Also, plenty of other people seem to like them. In fact, in California, the Model 3 was only about 300 units short of being the second best selling vehicle in California for the period of January to September 2019. It’s close to overtaking the Camry.

      More people will make the switch to EVs as problems get resolved. The range of EVs is improving. The Ford Model A had about 200 to 220 miles range if you’re lucky. Today, you can buy a Telsa Model 3 with a 322-mile range or a Model S with 373. That’s better than some ICE cars I’ve owned. Soon we’ll be able to buy 400 to 500-mile range cars. We live in a lithium battery-driven society and will see battery and charging technology steadily improving driven by advances in material science.

      • 0 avatar
        forward_look

        I think when solid state batteries become widespread, it will be the beginning of the end of gas engines.

        • 0 avatar
          ckb

          “state batteries become widespread, it will be the beginning of the end of gas engines”

          That will be the end of the end. The beginning of the end is happening right now.

      • 0 avatar
        CaddyDaddy

        “In fact, in California, the Model 3 was only about 300 units short of being the second best selling vehicle in California for the period of January to September 2019. It’s close to overtaking the Camry.“
        The first 40 miles inland from the Pacific Ocean between Marin and San Yasidro is not the rest of the Country. The electric car is a virtue signaling status toy. It will be a thing for local delivery / Service trucks and look at me types. Batteries detest temperatures beyond costal CA norms and I still don’t see an electric grid able to cope with the increased demand.

        In 2010 all we heard about was Hybrid this and that and the Prius was the #1 selling car in CA. Well that faded fast.

        • 0 avatar
          mcs

          “The electric car is a virtue-signaling status toy”

          Yeah, California is a tiny market for cars. Right…
          https://www.statista.com/statistics/196010/total-number-of-registered-automobiles-in-the-us-by-state/

          It has very little to do with “virtue signaling”. EVs are quieter, smoother, and quicker than ICEs. That has much more to do with their growing success than making a political statement.

          “Batteries detest temperatures beyond costal CA norms ”

          EVs are big sellers in cold climates like Scandinavia. Batteries might not like extreme cold, but they still work. There are ways around the cold issues like heating the battery when it’s cold. I’ve made plenty of long trips in -5F temps. The electric grid will handle EVs just fine. Utilities are having a lot of success with grid storage. Besides, EVs don’t take as much power as you might think to charge. If you’re driving 30 or 40 miles a day, it really doesn’t take that much power or time to top up again.

          EVs are already well beyond being restricted to just delivery use. Why would they? Great power, smoothness, fantastic acceleration, and plenty of range for long-distance trips.

          The Prius went by the wayside because better vehicles, full BEVs, came along.

          Judging by your name you’re going to be rocking a 3 cylinder 1 liter with CVT cadillac soon and doing your own version of virtue-signalling. But hey, to each his own.

          • 0 avatar
            CaddyDaddy

            …” Judging by your name you’re going to be rocking a 3 cylinder 1 liter with CVT cadillac”
            Now that is funny. Hate to burst your bubble but, unless it got a 4.3″ bore × 4.06″ stroke qty. 8, I ain’t sittin’ my butt in it.

            All electrics still fail when pushed beyond 300 miles, un-med. climate, towing or high wind situations. Please see TFL Truck model X road trip. Complete fail.

            BTW, it appears as an Elon Fan Boy, things are getting ugly in the defamation trial.

          • 0 avatar
            ToolGuy

            MMMMmmmm – 3 cylinders of 0.3L displacement each, a CVT *and* the wreath and crest? That’s like all my favorite things in one place!!!

          • 0 avatar
            28-Cars-Later

            “The electric grid will handle EVs just fine.”

            Hahahahahahaha.

            There are 98 commercial nuclear reactors and a number are scheduled for decommissioning in the next two to three years with only one coming online since 2000 (Watts Bar 2) and two under construction (Vogtle). The least powerful of the 98 current reactors produce 583MW per day… if all 98 could only produce 583MW per day it would take 19,040 wind mills @ 3MW each to replace the 98 reactors to my reelection. ***Replace*** with no increase in grid capacity.

            Between climate, economy, population, and ideas the People’s Republic of Kalifornia is LaLa Land, it literally exists in a different plane than the rest of the US. Things that can happen there cannot happen elsewhere and vice versa.

  • avatar
    slavuta

    Sure, electric cars have less parts. Less work. More hungry people. More unrest. More socialism.

    • 0 avatar

      Watch 2020 elections – it will be the triumph of socialism. Society is changing – new generation prefers stability of socialism even at expense of good pay in private sector. They have a feeling that system will crash financially which it has to do at some point (and it may first happen in Europe or Japan).

    • 0 avatar
      RotaryRedd

      Electric cars don’t produce socialism though? In 1899 and 1900 more new cars were electric than gasoline or steam powered, and I’d say that was definitely an era of capitalism. And with less complexity there are now new manufacturers being created, we lost Plymouth, mercury, Pontiac, etc. how many brand new ICE car manufacturers did you think were going to spring up(Elio)? Now there’s Tesla, Fisker, plus a few more yet to be seen, Faraday, rivian, Edison. It’s literally just a propulsion method, it lacks the emotion of an old cat-less V8 on leaded gas, sure. But so do almost all of the cars on the road already, most people consider a car an appliance, hardly any manufacturers make a car with a stick, let alone if they do, no one buys them. It’s a changing of the guard and it’s sad to see some of the legends go, look at my user name, think I’ll ever see an RX-9? Or even if I’d want one after you look at the turn the RX-8 made? I’ve driven electric go karts and electric golf carts, they can be a blast, it all just depends on how the chassis and suspension is tuned and if you can turn off some of the electric nannies.
      I’m optimistic about the future of electric cars, come 2021, I may just stroll into a ford dealership to check out a Mach-E or Volvo and a Polestar 2

  • avatar
    SCE to AUX

    Reducing labor content in vehicles has been a valid goal for 50 years. The market is soft, and the mfrs cited all have particular problems which need to be addressed.

    I’d say this is a good thing. Keeping people that you don’t need on the payroll is stupid.

  • avatar
    KingShango

    Since EVs have fewer parts I get that assembly workers will eventually get screwed as they start to gain traction but the idea that all these manufacturers need to hoard cash for “technology” is nonsense. They’re not sending a man to the moon or re-inventing electricity, they’re still designing and building a car, just a different type of car. How much does it really cost to reverse engineer a Tesla? It’s especially annoying when coming from GM since they had a production EV 25 years ago.

    EVs are just the current excuse justify the standard layoffs and cost cutting.

    • 0 avatar
      highdesertcat

      “EVs are just the current excuse justify the standard layoffs and cost cutting.”

      Precisely!

      And hopefully in the future, vehicles will require even fewer assembly workers as robotics displace humans on the assembly lines.

  • avatar
    Jeff S

    I agree with highdesertcat’s analysis on this. Cutting back on ICE passenger cars is not only about cutting slower selling vehicles but it is preparing for less ICE vehicles being made and sold. This is not because automakers want to do this as it is a matter of much of the developed countries are putting more stringent fuel economy standards and emission standards on ICE vehicles. We all read the same articles on this site and others about manufacturers adding more turbocharged I4s and I3s along with CVTs and most of use really don’t want those. Call it what you want “gaming the system of new standards” or making ICE vehicles so undesirable and adding more ethanol to the gasoline that customers will be embracing electric vehicles. Some will say that under President Trump the EPA is supporting a roll back of these standards but this will probably end up in the Courts for years with California fighting for stricter standards. Even if these standards are rolled back it will only be temporary because eventually we will have a different President and eventually one from the other party. So many uncertainties for the auto industry and most of the industry wanting uniform standards among the developed countries to contain costs and take away some of the uncertainties. Saying no to electric vehicles and wishing for them to go away will not change things the genie is already out of the bottle and ICE vehicles are the target. We can argue for or against Global Warming and the ozone but I don’t see the progression to electric vehicles slowing down.

  • avatar
    Tele Vision

    Electric cars will not yet make sense where I live and work. The distances are too great and, for months, the temperatures too cold – and the snow too deep. Even so, I asked my company about charging a Rivian at my shop during the day. They haven’t given me a definitive answer so it’s likely that it could be a ‘don’t tell; don’t know’ thing. I adore the idea of 100% torque at 0 RPM almost as much as I adore one motor at each wheel but my 2010 F150 is still doing the job in the snow – for a lot less money.

  • avatar
    raph

    Man if Musk’s origami truck becomes all the rage auto manufacturers could probably cut even more jobs.

  • avatar
    MKizzy

    Its not just assembly line workers who need to worry. It’s also all of the auto parts manufacturers and service technicians whose numbers could be drastically cut in an EV dominated automotive landscape.

    Those people happy about how cheap it costs to charge their EVs will be in for a shock. Just wait until utilities and municipalities get to work once EV penetration reaches a critical level. Between profit motives and taxes, not only will public charging stations be nearly as common as fire hydrants, but a fast charge may start costing the equivalent of a full tank of gas.

    • 0 avatar
      Scoutdude

      Its already more expensive to charge a pay to charge public stations than filling up a tank. We picked up a plug-in hybrid and at the slow level 2 charging it costs about twice as much as powering the vehicle with gasoline. Now charging at home is the opposite with electricity costing about 1/2 of running it on gas.

      • 0 avatar
        Carlson Fan

        “Its already more expensive to charge a pay to charge public stations than filling up a tank. We picked up a plug-in hybrid and at the slow level 2 charging it costs about twice as much as powering the vehicle with gasoline.”

        Why waste time driving around looking for public charging station when you can just pull in your garage and fuel up. Try that with an ICE!………..LOL

        Public charging in metro areas is simply not needed………NEXT!!!!!

  • avatar
    B-BodyBuick84

    As much as automakers may want to build the vehicles themselves, I feel that the biggest detriment to EV sales is our current infrastructure just isn’t meant to handle them.

    For example, a community near where I live has experienced a massive growth spurt in the past few years, with tons of new housing developments going up. The town council put a freeze on all development this past summer, as the infrastructure was at its breaking point. Terrible traffic with roads that are too narrow, not enough public transportation and facilities, and most importantly, their water and sewage systems are at a breaking point as many more people are using them (I.E what was once 4 single homes with 4 family’s is now a condo building with 100 families- that sort of thing).

    Electric vehicles have the same issue. I live in B.C Canada, and nearly %100 of our electricity is hydro powered with dams and rivers, making us nearly perfect for EV usage since our electricity itself has no emissions. Having said that, our electrical infrastructure would still require close to 100 BILLION Dollars (Not a typo FYI) to properly upgrade/ replace so that it could handle the day when EV’s are mainstream and who knows how many thousands of watts/ voltage/ electrical current will be needed on-demand to power them.

    This is just a guess of mine, but I suspect governments and municipalities will do what they’ve almost always done, which is ignore the issue until it bites them in the ass.

    • 0 avatar
      Carlson Fan

      “I feel that the biggest detriment to EV sales is our current infrastructure just isn’t meant to handle them.”

      The grid runs at a steady state. Peak demand is during the day. EV’s charge at night. The grid will be fine. My Volt charges up every night on power that simply would have gone to waste. Almost a sin Excel Energy even charges me for it. I consider it a zero emission vehicle when on battery power as the amount of pollution created by the grid that powers my home is the same whether it is plugged in or not.

  • avatar
    tylanner

    “We also have fewer horses and bayonets”

  • avatar
    Jeff S

    “As much as automakers may want to build the vehicles themselves, I feel that the biggest detriment to EV sales is our current infrastructure just isn’t meant to handle them.”

    “For example, a community near where I live has experienced a massive growth spurt in the past few years, with tons of new housing developments going up. The town council put a freeze on all development this past summer, as the infrastructure was at its breaking point. Terrible traffic with roads that are too narrow, not enough public transportation and facilities, and most importantly, their water and sewage systems are at a breaking point as many more people are using them (I.E what was once 4 single homes with 4 family’s is now a condo building with 100 families- that sort of thing).”

    Precisely, I live in NKY across the Ohio River from Cincinnati and so many more people have moved to NKY because of the lower housing cost and lower taxes that the roads, water, sewer, and electrical services are constantly being expanded. Farm lands have become housing, apartment, and warehouse spaces. Amazon has been expanding like wildfire and CVG has become one of their major hubs. Electricity is very low cost in KY but again the infrastructure is a long ways from being where it needs to be for EVs to replace most ICE vehicles.

  • avatar
    28-Cars-Later

    This is simply an excuse, the industry isn’t doing so well and they all want to cut costs heading into a recession.

  • avatar
    AVT

    At no point will the world be completely electric vehicles baring mass exodus from cars to public transit. There are not enough far raw materials to build batteries for every car sold. It’s as simple as that. Even today, the total percentage of electric vehicles worldwide sits at less than 1 percent. And that already strained most companies in terms of keeping up with demand for the materials required to build batteries. Realistically, electric cars will be the new luxury vehicles of the future. But everyone having one, no way. And that’s just America. Go over to India where a majority of the population essentially lives at or near poverty, you won’t see them lining up to buy electric cars anytime soon. And bear in mind they have an additional billion people of population than we do.

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