The automotive industry is a cyclical one, with boom and bust cycles happening through the 100-plus years it has existed. It’s difficult to juxtapose the booming automotive industry and its profits with layoffs and plant closures, but that’s where we are at the close of 2018. The last few years have been a boon for automakers both domestic and foreign as consumers purchase more vehicles than ever before. But it’s that inevitable end to the growth cycle that General Motors and its competitors such as Ford are fearing.
Both Michigan automakers announced massive restructuring efforts this year designed to trim the fat while repositioning resources to focus on electric vehicles and self-driving technologies. But no two companies are alike, and there’s a stark contrast between Ford and General Motors when it comes to the number of proposed layoffs.
Right now, GM is said to be laying off 14,800 factory workers and white-collar employees. And while the company is ruthlessly quick with trimming salaried workers, the Detroit automaker cannot unilaterally close plants without approval from the United Auto Workers union. Negotiations between the union and GM are set to take place in 2019.
Ford, on the other hand, is a bit of a mystery. The Dearborn automaker is mum on official numbers. However, that hasn’t stopped some from speculating, and those speculators are bearish. Morgan Stanley analyst Adam Jonas believes Ford could cut as many as 25,000 jobs. That’s nearly double the layoffs proposed by General Motors.
The media is treating both differently, too, thanks to some fancy PR maneuvering by Ford. When General Motors announced its proposed $6 billion restructuring, politicians leaped at the opportunity to lambast the automaker. Ford, on the other hand, was quick to announce it would shift employees from one plant to another due to production slowdowns with specific models. However, the mass media hasn’t latched onto the news Ford is also planning to lay off workers next year, too.
Ford and General Motors are crosstown rivals, but they play by the same rules and often the same market forces. Sedans and small cars are out while consumers flock to crossovers, SUVs, and trucks. That means model discontinuations and, in some cases, plant closures, affecting new vehicles like the 2019 Cadillac CT6-V. Both Ford and General Motors understand the market will slow down in the coming years, and the only way to survive such a downturn is to take drastic actions now when profits are high, and the car-buying public is hungry for vehicles with high-profit margins.