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Auto workers face bumpy road ahead

By Sun Chi | chinadaily.com.cn | Updated: 2019-12-10 13:21

BMW exhibits its new energy vehicle model BMW i8 at the Shanghai auto show in April. [Photo by Zhang Dandan/China Daily]

Multinational carmakers have put a brake on "layoffs" for 2019, the 21st Century Business Herald reported.

In the past two weeks, two German auto behemoths, Daimler and Audi, alone announced plans to sack nearly 20,000 employees.

The BMW said on Nov 27 that it was striving to save $13.23 billion before 2022 partly by reducing staff strength and bonus.

Affected by negative factors such as decline in the auto market, trade disputes and Brexit, a new round of "layoff" has spread to Daimler, Ford, GM, Honda, Jaguar Land Rover, Nissan, VW and other major automakers globally.

The 21st Century Business Herald said based on preliminary statistics nearly 80,000 auto workers around the world were affected by the end of November.

Cutting cost, adjusting structure, improving efficiency are deemed by experts as results of conflicts between profit decline and industry transformation.

Influenced by multiple factors, three major global auto markets remain weak.

Bernhard Mattes, head of the German Association of the Automotive Industry (VDA), said on Dec 4, the competition will get stiffer and headwind stronger in auto industry. Sales volume will drop by 5 percent in 2019, the largest drawdown since 2008. German automakers will thus cut more jobs next year.

Lang Xuehong, deputy secretary-general of the China Automobile Dealers Association, predicted at an auto forum on Dec 1 that the Chinese auto market will continue to decline until the end of 2020.

Sales continue to drop due to new emission control regulations in European auto market; the US auto market is also gloomy because of rising interest rate, tariffs and international trade factors.

With tighter emission standard around the world, electric transformation is an irresistible trend. But automakers face huge expenses in research and development. The 21st Century Business Herald concluded that cooperation is a better strategy to share expenses and risks in electrification, pilot driving and shared mobility.

"Whether carmakers choose to cut jobs or cooperate, they only stand at the starting line of future transformation," experts said. In short term, the current approach of automakers is aimed at reducing cost rather than gaining profit. "In the long run, how to increase profits will be the fundamental problem carmakers will face as the industry goes through transformation," they said.

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