Automakers Shedding JobssteemCreated with Sketch.

in automobile •  3 months ago 

Earlier in the fall, the United Autoworkers (UAW) Union staged a strike that lasted 40 days. At the heart of the matter was the loss of jobs that the union was suffering. General Motors, the target of this dispute, was slated to close 4 plants, costing workers their jobs.

In the end, the Union was able to keep one plant open. Nevertheless, this was an empty victory since the other three plant closures was proceeding.

This is not a problem isolated with General Motors. There is another layer added to the ongoing trend of automation. Over the last 3 decades, tens of thousands of auto workers lost their jobs as automation came in and replaced them.

Now, we are seeing the electrification of the automobile provide another concern for these workers.

Front and center is the simple fact that electric vehicles are much simpler in design. They require a lot less parts meaning assembly is much easier. This equates to the reality that less workers are needed.

What we are witnessing is a global situation. Audi, a division of Volkswagon, and Diamler, announced that they are laying off 20,000 workers. Overall, automakers have come out and said that 80,000 jobs will be cut globally.

In Germany alone, there is the chance that 150,000 jobs are already at risk of disappearing in the next few years.

The automakers are watching their industry transition. Tesla started the process by creating a line up of all electric vehicles. This, coupled with a major shift away from fossil fuels, has pushed the traditional automakers to embrace electric. Most major manufacturers announced new models arriving within the next few years.

Another potential problem, from an employment standpoint, is the idea that we are seeing the foundation laid for transportation as a service (TaaS). This is taking the ridesharing idea to another level. With the expected implementation of autonomous driving, the break even point on a ridesharing vehicle is much lower. Thus, people such as Elon Musk see a future of fleet sales.

What this equates to is the likely decrease in the number of automobiles that are purchased. Cars tend to sit 90% of the time. By having areas blanketed with autonomous vehicles for hire, the overall efficiency of the system increases dramatically.

The final issue is the supply chain. Here again, we see the possibility of more people losing their jobs since they are being streamlined. Less parts means less suppliers. There is no way around this. Couple this with a technology such as 3D printing, which most manufacturers are embracing, and we again see the need for assembly reduced.

This is one of the industries where the change is most obvious. The next 5 years will see a vast shift in the automobile industry. What we have today will not compare to what is in place by the middle of the next decade. This is how fast the transition is taking place.

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This crisis will effect the global economy