The automotive industry is changing. We feel as though we’ve written that a dozen or more times in the last six months. General Motors is navigating a treacherous restructuring. Fiat Chrysler Automobiles is riding high thanks to robust crossover and SUV sales, and a portfolio filled with desirable products. Even Ford is trying to right the ship, one of the first automakers to ditch sedans for crossovers, SUVs, and pickup trucks. But it’s not all rosy. Overall new car sales are falling as automakers position themselves for the next decade of automotive innovation. Not even FCA can avoid the swings in consumer trends. The company has announced 1500 workers at its Windsor, Ontario plant will lose their jobs, according to The Detroit Free Press.
FCA builds the Chrysler Pacifica, Chrysler Pacifica Hybrid, and Dodge Grand Caravan in Windsor, which currently employs 6,104 people on three shifts. But minivan sales are falling, too. Not even their uncompromised familial utility could fend off the allure of a crossover — Pacifica sales are down 24 percent through February with Caravan sales down 27 percent. To compensate, FCA is eliminating a third shift and 1500 jobs. Even overall FCA sales are flat.
The latest layoffs in Windsor by FCA are just another blow to the Ontario manufacturing workforce. When General Motors announced its restructuring plan last November, part of the plan included proposing to indefinitely idle five North American factories, four in the U.S. and its Oshawa, Ontario facility. Unifor, the Canadian workers union, went to great lengths to try to keep the factory operating. “Constructive negotiations” between Unifor and General Motors has led the union to suspend its aggressive campaign against the automaker as the two work toward finding ways to preserve jobs at the factory.
These layoffs could be canaries in the coal mine. Automakers are expecting a market contraction as sales slow following the sales boom that happened after the 2008 financial crisis. A bustling economy can only last so long before it begins to correct itself, which it may already be doing, at least in the automotive sector, and that could spell disaster down the road. Auto-loan delinquencies are rising along with the cost of monthly payments, new-car prices, and loan terms. While automakers are raking in billions in profits, the gravy train could come to a stop sooner than expected.
Source: The Detroit Free Press