Automakers from General Motors to Toyota are on a mission to phase out gasoline vehicles.
world
Aug. 25, 2022
TIM LEVIN, BUSINESS INSIDER
4 min read
Ford slashes thousands of jobs as it goes electric
Workers build Ford F-150 trucks at one of the automaker's assembly plants. (Inside EVs)
Story highlights
The global auto industry is barreling full steam toward an electric future.
Ford in August confirmed it will lay off roughly 3,000 workers as part of its restructuring.
Electric cars require less manual labour and different skillsets than conventional vehicles.
And while a future full of clean, electric cars will help reduce harmful emissions and stunt climate change, it may spell disaster for the thousands of auto workers whose jobs will be rendered obsolete by new technologies and manufacturing processes.
As one might surmise, workers who assemble gasoline engines, transmissions, exhaust systems, and the myriad of other parts not needed in electric vehicles will likely bear the brunt of the transition. Moreover, electric motors and batteries are much simpler than traditional powertrains, allowing carmakers to maintain the same production output with fewer workers.
Both Ford and Volkswagen have estimated that electric cars require 30% less labour than conventional vehicles. The consulting firm AlixPartners reckons that 40% less labour goes into an EV's motors and battery pack than an engine and transmission.
The impact this epic shift will have on automotive employment isn't fully understood yet. But industry watchers warn that the sector will lose jobs, and some automakers have already begun to trim their headcounts.
"The industry is going through a transition unlike anything we've ever seen," Brett Smith, director of technology at the Center for Automotive Research, told Insider. "There's a pretty strong chance that there will be fewer people building these cars, fewer people building the parts to these cars, and that will create challenges in some automotive communities."
In a September study, the Economic Policy Institute, a liberal think tank, said that the US could shed 75,000 auto jobs by 2030 if electric cars rise to 50% of domestic sales. (Today, they account for around 5%.) European automotive suppliers estimate that rapid electrification could cost them 275,000 jobs by 2040, even accounting for new positions that arise making EV parts.
To be sure, a flurry of activity in battery and motor production will offset the erosion of traditional automotive jobs to some degree, but not without massive upheaval.
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Workers build Ford F-150 trucks at one of the automaker's assembly plants. (New York Times)
According to an analysis by Boston Consulting Group, the shift to EVs in Europe will result in 630,000 fewer jobs at automakers and suppliers of parts specifically for combustion-engine vehicles by 2030. But booming demand for batteries, charging infrastructure, and the like will create 580,000 new roles.
"While the core automotive industry will certainly suffer significant job losses, some new industries that support electrification will experience tremendous job growth," the firm said. When all is said is done, policy measures to spur domestic EV production could help the US add 150,000 automotive jobs overall, the Economic Policy Institute estimates.
Still, no guarantee displaced workers will benefit from newly created positions. "It's not going to be the same people getting new jobs. It's often going to be new jobs created in new places for new people," Smith said. Automakers and their partners are planning a slew of battery plants in the US, but many of those factories will be far away from current auto manufacturing. Battery packs lend themselves to automation, Smith added.
White-collar jobs won't be immune either. People who design systems for combustion vehicles will either need to be retrained so they can apply their skills to the next generation of EVs or face losing their jobs, said Tammy Madsen, a business professor at Santa Clara University.
These cuts are already underway: Ford in August confirmed plans to lay off roughly 3,000 salaried and contract employees, the Wall Street Journal and others reported, as part of a larger restructuring.
While nobody can predict the exact contours of the budding EV revolution, it appears that the technological shift will disrupt automotive manufacturing and employment as much as it will overhaul the makeup of streets and highways.
"We absolutely have too many people in some places, no doubt about it," Ford CEO Jim Farley said on a recent earnings call. "We have skills that don't work anymore, and we have jobs that need to change.
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