German Auto Supplier Bosch to Cut 5,500 Jobs in Further Sign of Carmakers’ Woes

AP

15:51 JST, November 23, 2024

FRANKFURT, Germany (AP) — Germany’s technology and services company Bosch said Friday it planned to reduce its automotive division workforce by as many as 5,500 jobs in the next several years in another sign of the headwinds hitting the German and global auto industries.

The company cited stagnating global auto sales, too much factory capacity in the auto industry compared with sales prospects and a slower than expected transition to electric-powered, software-controlled vehicles.

The news comes two days after Ford Motor Co. announced plans to drop 4,000 jobs in Europe, and with Volkswagen employees threatening work stoppages over what they say management has told them are plans to close as many as three factories in Germany. Revenue at Stellantis, created through the 2021 merger of PSA Peugeot and Fiat Chrysler Automobiles, tumbled 27% in its most recent quarter that ended this fall.

Auto sales have slowed this year in Europe as consumers stung by inflation hold back on spending, while automakers have sunk billions into developing electric cars only to see slower sales than expected and new competition from cheaper Chinese brands. The German government abruptly cancelled purchase incentives at the end of last year, sending electric vehicles sales in that country down by 27% over the first nine months of this year.

Some 3,500 of the job reductions at Bosch would come before the end of 2027 and would hit the part of the company that develops advanced driver assistance and automated driving technologies, as well as centralized vehicle software, said Bosch, which is headquartered in Gerlingen near Stuttgart. About half those job reductions would be at locations in Germany.

“The auto industry has significant overcapacities,” the company said in a statement. “In addition, the market for future technologies is not developing as originally expected … At the moment, many projects in this business area are being put off or abandoned by automakers.”

In addition, 750 jobs would be lost at a plant in Hildesheim, Germany by end 2032, 600 of those by the end of 2026. A plant in Schwaebisch Gmund would lose some 1,300 over between 2027 and 2030.

The reductions are still in the planning stage and final numbers would have to be agreed with employee representatives and carried out in what the company said would be a socially responsible way.

While automakers put their names on the cars they sell, most of the car is actually made by a series of suppliers

Some 230,000 people work for Bosch’s mobility division, out of a global workforce of 429,000. In addition to its business as an auto industry technology supplier Bosch makes factory and building equipment and software across a range of products including industrial boilers and waste-heat recovery systems, video security systems, and power tools.