Automakers can’t help but acknowledge the global recession in their industry after a decade of growth. As a result, they are slashing payroll across the board, according to Bloomberg. Countries like China, the United Kingdom, Germany, Canada and the United States have all seen at least 38,000 job cuts over the last six months in the automotive sector. And this could just be the beginning of larger cuts to come.
Daimler CEO Dieter Zetsche said Wednesday that "sweeping cost reductions" are ahead to prepare for what he is calling "unprecedented" industry disruption.
Bank of America Merrill Lynch analyst John Murphy said: “The industry is right now staring down the barrel of what we think is going to be a significant downturn. The pace of decline in China is a real surprise.”
Automakers are cutting shifts and closing factories across the world but the cost cutting goes beyond that. Salaried workers are also being cut, a surefire sign that slowing sales in both China and the US are taking their toll. Additionally, the slow down is coming at a time when automakers have deployed significant capital to invest in electric vehicles.
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10 comments:
Northwest Woodsman: Bloated industry headed for collapse. I really don’t think it is necessary for every auto manufacturer to produce 10 or 15 SUVs to compete with other companies. Recall when Ford had just the Bronco and Chevrolet had the Blazer? Now they must have multiple 4wd vehicles to compete. I pass by car lots and wonder how those dealers could possibly think that they will actually sell enough of those vehicles to keep their inflated businesses running. Maybe they should just give the excess to the homeless to live in.
That has always amazed me too. You drive by car dealers and they look like stadium parking lots. Who's buying all these cars ? When you see them on the road it's one tiny chickie doodle on her phone or doing doing her make up alone in this giant vehicle. What a formula Madison Avenue came up with creating the American mystique and romance with cars. If it's dependable and lasts me ten years I am thrilled I could care much else about it. I am more enamored with my lawn mower.
More cars could sold be at cheaper prices
11:45 you hit the nail on the head. Domestic automakers in the 90s used some pretty shady advertising tactics to sell SUVs because they were getting killed by the Japanese and their had been a high tariff on light trucks since the 30s or 40s. They wouldn't make the vehicles better, just try to push the ones the Japanese couldn't compete as well in. The Unions are to blame here for bloating the salary and benefits of workers to unsustainable levels.
So, these companies should support 'mean and lean' policies. Make ONLY the best sellers; cut the junk out...Make less expensive models by cutting some of the 'bells and whistles'...Cut the top brass; always too many there.
Truck prices are outrageous.
Thank you 10:23
I say the exact same thing
I drive by all these dealers and see about 15-20 pick ups and 15-20 SUVs and wounded how they can afford to have all this inventory sitting there
No way their selling all those vehicles
Trucks are totally crazy prices
I buy a used one for around 20,000.00 and I now have over 350,000 miles on it and this is my 3rd one
I just tell these dealers their plain crazy
Go figure
The greedy cost is why I drive 20 year old vehicles. I keep up the maintenance and appearance. Screw this greedy dealers. They give you a greater mark down than what they do, since they keep the incentives they get from the Corporations instead of passing it on to the consumer. Can't wait till these greedy Dealerships go broke.
12:21 Have you researched the CEO and executive salaries of the auto industries. Unreasonably out of proportion with the workers actually assembling the vehicles. Airlines are crying the blues and pulling the same stunts too.
Around here they have 100s of pick ups and many hundreds of SUVs, CUVS, and all other grades of UVs. They must be selling them, they are thick as thieves down here.
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