Climate Change Policies Threaten Millions Of Car Workers Worldwide

  • Date: 07/06/19
  • The New York Times

Worldwide, eight million people work directly for auto manufacturers, and many times more work for companies that supply brakes, tires, sensors and other components. Those jobs are now threatened.

FRANKFURT — It’s a scary time to be in the car business.

The internal combustion engine is under attack from electric challengers. Car ownership is becoming optional in the age of Uber. Regulators around the world are fining companies that don’t do enough to cut carbon dioxide emissions, even as buyers demand gas-guzzling S.U.V.s. Global auto sales are slipping for the first time in a decade, disrupted by President Trump’s escalating trade war.

With so much bearing down on them simultaneously, it’s little wonder that companies like Fiat Chrysler and Renault were considering joining forces to survive. Fiat Chrysler’s decision Wednesday night to withdraw its offer to merge with Renault, citing government demands in France, was another reminder that change is complicated for traditional carmakers.

The aborted proposal to create the world’s third-largest automaker was a response to the disruption threatening an industry that accounts for many of the world’s factory jobs and is crucial to the economic fortunes of the United States, Japan and Europe.

New technology has unraveled industries like entertainment, media, telecommunications and retailing, weakening the job security of millions of workers and helping to fuel populism. Carmakers, clearly, are next.

“It’s going to be the biggest change we’ve seen in the last 100 years, and it’s going to be really expensive even for the biggest companies,” said Erik Gordon, a professor at the University of Michigan Ross School of Business.

The major auto companies will spend well over $400 billion during the next five years developing electric cars equipped with technology that automates much of the task of driving, according to AlixPartners, a consulting firm. They must retool factories, retrain workers, reorganize their supplier networks and rethink the whole idea of car ownership.


A Volkswagen factory in Wolfsburg, Germany. Carmakers globally are among the last employers that operate vast, bustling plants.CreditSean Gallup/Getty Images

For the auto manufacturers, this upfront investment is a matter of survival. If they don’t adapt, they could become obsolete. Yet no one is even sure whether customers are really willing to pay for the technology and whether it will ever earn a profit.

Investors have already signaled who they think will come out ahead of this transformation. The electric carmaker Tesla, despite all its problems, is still worth more on the stock market than either Fiat Chrysler or Renault. Uber is worth much more than the two combined, even after reporting a $1 billion quarterly loss.

The stakes for society from this industrial realignment are high. Car companies like Volkswagen, General Motors or Toyota are among the last employers that operate vast factories where thousands of workers pour in and out of the gates at shift changes.

Worldwide, eight million people work directly for auto manufacturers, and many times more work for companies that supply brakes, tires, sensors and other components.

Those jobs are threatened. Last year global car sales declined for the first time since 2009. Though small, the decrease may signal the onset of a global recession because the auto industry is such an important economic catalyst, analysts at Fitch Ratings said in a recent report. […]

By some estimates, half of all auto industry jobs in Germany are at risk. Battery-powered cars have far fewer parts than cars reliant on gasoline or diesel, endangering suppliers of valves, pistons and other parts in conventional engines. The most important part of an electric car, the battery cells, usually comes from Asia. 

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