Recent reports highlight ongoing layoffs in the automotive parts sector in France and Germany, driven by declining car sales in Europe and China. Major parts manufacturers such as Schaeffler, Michelin, and Valeo are among those announcing job cuts. The industry faces a crisis characterized as one of the most challenging periods due to prolonged declining sales.
European auto parts suppliers, employing 1.7 million people, revealed plans to cut 32,000 jobs in the first half of 2024, surpassing layoffs seen during the COVID-19 pandemic. The French Automotive Industry Association indicates that while carmakers have managed to compensate for losses through price increases, parts manufacturers face more complex challenges.
The crisis has severely impacted German and French manufacturers due to declining factory output and reduced competitiveness. Schaeffler (SHA, Financial) announced 4,700 job cuts in Europe, following its merger with Vitesco Technologies. Bosch has also announced several rounds of layoffs globally, affecting around 7,000 positions, with German factories hit hardest.
ZF Group is cutting 25% of its workforce in Germany, equating to 14,000 positions, due to competitiveness challenges. Meanwhile, Michelin (ML) plans to close two factories in western France by 2026, affecting approximately 1,250 employees. The closure results from business declines and competition from Asian tire manufacturers.
Continental has announced it will cut 7,150 jobs globally by early 2024 as part of a cost-reduction plan to enhance competitiveness amidst the shift to electric vehicles.
Smaller manufacturers are also affected, such as Demaray in eastern France, which faces significant layoffs due to halted orders from ZF Group. Valeo's two factories in the Ardennes have entered bankruptcy-related procedures.
The transition to electric vehicles is prompting parts manufacturers to realign their strategies, necessitating new hires for electric vehicle and battery production. However, this shift is progressing slower than anticipated.
