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Home / Business / GM, Ford shrinks its workforce. Here's why.

GM, Ford shrinks its workforce. Here's why.



General Motors and Ford Motor Co. Both are cutting thousands of jobs that automakers are addressing with a decline in sales in key markets, changing consumer benefits, and stricter environmental regulations across countries around the world.

Ford announced Monday It will reduce its international workforce by 7,000 jobs, part of Dearborn's, Michigan-based company $ 11 billion redeployment. GM announced last year that it would close several North American plants and cut as many as 14,000 jobs.

Underwriting of the announcements changes production lines on the two largest US auto companies, as consumer interest varies from passenger cars to sports car and pickup.

Tighter emissions requirements in countries such as China and those in the EU, coupled with an increasing interest in emissions-free cars, accelerate a swing against electric cars.

GM, Ford and others also hail millions in autonomous cars, banks hoping that technology will define the future of automotive production.

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At the same time, President Trump's tariffs on imports of steel and aluminum have added millions of dollars in price. The industry received some statements after Canada and Mexico reached agreements last week with the United States to lift the fees.

But as car manufacturers invest heavily in new models, a global downturn in sales leads to concern among analysts and other industry experts who deserve to be under pressure in 201

9.

In China, the main automotive market, sales decreased 14.6 percent in April to 1.98 million cars, according to the China Association of Automobile Manufacturers. For Ford, sales in the region fell almost 40 percent in 2018, while GM dropped 10 percent last year.

Both companies have outlined a strategy for the region that involves a renewed product range. Ford plans to produce a new Explorer and Lincoln Corsair in China, a motion manager says it will cut costs.

"There is a big, big improvement in the business model for each of them," says outgoing CFO Bob Shanks recently. "Material costs are lower in China, labor is lower in China, we can be closer to the market in terms of consumer demand . "

At the same time, GM is preparing to launch around 20 new or updated models in the country, including new Cadillac crossovers.

" Auto companies all over the world are considering life where global production has greater downside risk than up, especially as we see the effect of China, "says analyst Adam Jonas in a recent research report.

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