Steel Markets
US Auto Industry Tightens Belt as Sales Dip
Written by Sandy Williams
May 18, 2017
U.S. auto manufacturers are tightening their belts as automotive sales fall from their two year highs. Ford Motor Co. said it will cut 1,400 salaried jobs in North America and Asia through voluntary retirement as shares of stock dropped 2.5 percent on Wednesday.
Ford will offer financial incentives and generous retirement packages to encourage managers and other non-production workers to leave by the end of September. The cuts follow the reduction of the company’s European white-collar workers in 2016.
Ford has also adjusted production schedules in Ohio and will lay off 130 workers at its Avon plant as demand slows for its F-series pickup trucks.
“Reducing costs and becoming as lean and efficient as possible also remain part of that work,” said Ford spokesperson Mike Moran.
General Motors announced it will stop selling Chevrolet vehicles in India and South Africa by the end of 2017. The manufacturing facility in Telegaon, India will produce cars for export only to the U.S. and Mexico. GM’s South Africa manufacturing plant will be taken over by Isuzu Motors.
In February GM announced that it will withdraw the Chevrolet brand from East Africa and sell its 57.7 percent share of GM East Africa to Isuzu. GM International will also streamline its regional headquarters in Singapore.
“As the industry continues to change, we are transforming our business, establishing GM as a more focused and disciplined company,” said GM Chairman and CEO Mary Barra. “We are committed to deploying capital to higher return initiatives that will enable us to lead in our core business and in the future of personal mobility.
GM expects to realize annual savings of $100 million from the actions. The company will take a special charge of approximately $500 million as result in second quarter.
“These actions will further allow us to focus our resources on winning in the markets where we have strong franchises and see greater opportunity,” said GM President Dan Ammann. “We have compelling plans for growth in both the top line and the bottom line as we invest for the future.”
GM plans to lay 600 workers at its Delta township plant in Michigan as it phases out production of the GMC Acadia. As of May 12, the plant closed its doors to prepare for the launch of the Enclave and Traverse models. In June when it reopens the third shift and 600 workers will be gone.
FCA is initiating a temporary layoff of 3,200 workers at its Toledo Assembly Complex will allow the company to end production of the Cherokee and retool for the new Jeep Wrangler. Production of the Cherokee will move to the Belvedere, Ill. Workers are expected to return in six months in a phased-in approach.
FCA says production will be down in 2017 mostly driven by the discontinuance of their Chrysler 200 and Dodge Dart models. The company is facing other challenges including a possible lawsuit by the U.S. Justice Department regarding alleged violation of clean air regulations by FCA’s diesel vehicles. The company also launched a recall last week of more than 1.25 million pickup trucks due to a software problem related to seat belts and air bag deployment.
Sandy Williams
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