Automakers are offering buyouts to shed jobs permanently, laying off workers temporarily, not rehiring temp workers who had expected to return and extending holiday shutdowns to keep vehicle inventories in check.
Virtually no automaker is immune. Even manufacturers of hot-selling models like Mini, Audi and Renault's Dacia Logan are trimming production and laying off workers to meet lower demand - or taking action just in case sales fall further south. Nor is any region exempt. The fast-pace growth of China and Brazil has slowed, prompting automakers in those emerging markets to slow or halt production lines as well.
General Motors said this week it will suspend production at its factories in South Korea for about two weeks starting next month, a signal that the slump is spreading to Asia. The shutdown will take effect from late December and affect all five of GM's Korean plants formerly owned by Daewoo, one of GM's best-performing business units. The Chevrolet Aveo sold in the U.S. is among the models built in Korea.
After reporting its $2.5-billion net loss for the third quarter, GM said it would lay off 5,500 workers, even including a few at its Orion Township, Mich., assembly plant that builds the Chevrolet Malibu and Pontiac G6.
Sources tell AutoObserver GM has considered a corporate-wide closure of global operations similar to its traditional two-week summer shutdown in an effort to slow is blazing cash burn, sources say. So far no such official announcement has been made.
GM did confirm last week that it would force a full, two-week shutdown of its technical centers and test tracks in the U.S. so lights and heat can be reduced, saving millions. Employees who had not scheduled vacation time to extend the holiday are allowed to borrow vacation days from 2009.
A German newspaper reported that GM was pondering a shutdown of all its European assembly plants for several weeks in November and December. Citing a union source, the paper said GM planned factory shutdowns for two weeks in November and from the middle of December until the new year. GM had previously announced it did intend shutdowns at two German plants and two in the United Kingdom in order to chop 40,000 units from its late-year production schedule; the paper added that unions at a GM plant in France had been told of a closure of nearly three weeks beginning in December and lasting until January 2009.
Ford announced plans Thursday to temporarily close nine North American plants in this fourth quarter, laying off 23,000 workers and trimming North American vehicle production by a third this quarter.
The longest shutdowns will be for the full month of December at the Louisville, Ky., plant that builds the Explorer SUV and the St. Paul, Minn., that makes the Ranger pickup truck.
Plants in Oakville and St. Thomas, Ontario, and Kansas City, Missouri, will close for three weeks in November and December. The Avon Lake, Ohio, will close for two weeks. One-week shutdowns are slated at facilities in Flat Rock, Michigan; Hermosillo, Mexico; and Wayne, Michigan. Vehicles affected include the Ford Mustang, Econoline, Fusion, Edge, Escape and Flex, the Lincoln Town Car and the Mercury Mariner.
BMW announced this week that it will close its Regensburg plant for an extra 14 days over the winter break. BMW will reduce the number of 1- and 3-Series cars it originally planned to build there by 9,000. The plant will be closed from Dec. 8 to Jan. 7, 2009, extended beyond the previously schedule Dec. 22 - Jan. 6 holiday. BMW is cutting production by 65,000 vehicles in total this year.
BMW's Mini will stretch the annual Christmas shutdown from the traditional two week to four weeks to cut 9,000 vehicles from the production schedule. While sales of the Mini Cooper and Clubman have been strong, even in the slumping U.S., a company spokesman said the move is proactive in light of the deteriorating economy and car market.
Daimler AG is offering voluntary buyouts of workers for the first time in the U.S. The 4,000 workers at its Alabama plant that make the M-, GL- and R-Class SUVs have been offered buyout deals, though the company hasn't said how many it hopes will accept them. In addition, Daimler has extended the Christmas holiday for Mercedes-Benz plants in Germany.
In the U.K., Jaguar Land Rover (JLR), now owned by India's Tata Motors, said it is preparing for a "very tough" 2009. After eliminating a couple hundred jobs, British automaker is seeking 300 to 400 more people to leave.
Audi, despite recording a global sales hike in October in contrast to most other automakers, is considering an extension of its Christmas shutdown to reduce production at its Ingolstadt and Neckarsulm plants.
Even Renault has cut back production of its sales darling, the low-cost Dacia Logan. The automaker will idle Logan production at its plant in Romania from Nov. 20 to Dec. 7. Sales of the little Logan have cooled in Europe.
Toyota is cutting jobs at its Kyushu, Japan, plant that makes Lexus models. The plant, which makes the Lexus RX, ES and IS models, laid off 800 temporary workers in August due to slow sales, with the promise of re-hiring 500 of them. However, they will not be rehired because of continued soft sales.
In once booming Brazil, where car sales have been socked by bankers being stingier with car loans, Ford has extended the Christmas holiday by a week or two at its various plants that employ 8,800 workers. Volkswagen sent workers on a forced holiday recently. Fiat suspended production a couple times in the past month. And GM imposed forced vacation on 7.000 employees at its plants.
In China where sales have slowed from their sizzling pace of recent years, PSA Peugeot this week laid off 1,000 temporary workers of the 9,000 people in its joint venture plant in China. Management told the workers they might be brought back when sales rebound. Also cutting production in China are Chery, Dongfeng, Changan Ford Mazda and Jinghuai. Volkswagen has hinted at scaleback and China's SAIC, GM's partner, has been adjusting production.
Vehicle production scalebacks are trickling down to suppliers. In Germany, the world's largest automotive supplier, Bosch, has halved workweek hours for its 3,500 workers for the next six months, a move that is likely to spared to its other operations.