— This is the script of CNBC's news report for China's CCTV on December 5, 2019, Thursday.
A new round of layoff in auto industry is coming, according to compiled data, in the next few years, more than 80000 autoworkers are going to lose their job.
In the last week, nearly 200 jobs were shed from Daimler and Audi, which are mainly in Germany, U.S. and UK. Economies with fast growth are not immune from that as well, major automakers are cutting down their business scale locally.
Germany has been the "weather forecast" in global auto industry, president of VDA told the media that for autoworkers, "winter is coming".
As this layoff trend would worsen in 2020.
This round of layoffs in the auto industry is caused by a combination of factors. On market front, volatility brought by Brexit, slowdown in global economy growth caused by trade disputes among major economies and popularization of Shared travel technology and application hit the car's demand. In auto industry, the trend towards electrification is also upending the car market, global car sales is dropping at its fastest speed since financial crisis.
Global car sales will fall by 3.1m units this year, even worse than that in 2008, according to Fitch's report which released in Nov.
As a giant in European automobile industry, German car production has fallen by 18 per cent since its mid-2018 peak, Goldman Sachs reckons that this decline in car production accounts for a third of Germany's GDP decline since 2017. On the other hand, the automation trend is also threatening the jobs of workers in the traditional auto industry. The assembly is usually the most labor-intensive part of a conventional gasoline vehicle.
The ford motor company and other industry experts estimate that electric cars require about 30 percent less labor than conventional gasoline-powered cars with engines, fuel systems, transmissions and other complex components. For now, traditional car makers don't make enough EVs, that doesn't affect auto workers much, but the trend is changing.
GM closed 3 plants this year to save money for R&D. Mercedes Benz eliminated 10000 jobs last week, Audi also announced recently that it would lay off 9,500 employees to save about 6 billion euros to invest in electric cars. Once EVs become a mainstream, then traditional auto workers will face more pressure from losing their job.
IG Metall, Germany's main automotive union, predicts that 75,000 jobs in making conventional engines and gearboxes will be eliminated by 2030. The union also called on auto companies and government agencies to help address unemployment in the auto industry through retirement and retraining. We will keep an eye on this issue.