Why Thousands Of Nissan, Stellantis, And Audi Workers Are Losing Their Jobs

As some automakers feel the squeeze of demand falling short of supply due to a variety of internal reasons, a few are planning some serious downsizing, meaning some people working at Nissan, Audi, and Stellantis might not be working there for much longer. While not all of these people are getting laid off, this news just sucks both for those directly affected and those wanting to move into positions that may no longer exist.

Yes, headcount reductions are planned by multiple automakers, as several brands have found themselves in tight spots due to having to reap the shitty seeds they’ve sown. Guess who ends up with the short end of the stick in cases like these? That’s right, usually normal people. Expect thousands of workers in various parts of the globe to no longer be employed by these companies, although each seems to be going about things in a slightly different way. Oh, and Chinese automakers using Canada as a North American foothold? Yeah, that doesn’t seem to be happening anytime soon either.

Matt’s left me in control of today’s issue of The Morning Dump, and while I wish I could serve you up something less gloomy, sometimes those are just the cards we’re dealt. So, grab a cup of coffee or tea, sit back, and get ready to sift through some bite-sized pieces of car news you might not want to read, but should probably know about. Can’t have dessert without eating your greens, right?

It’s Getting Brutal At Nissan

As Automotive News reports, Nissan has been having a dismal stretch, and now it’s willing to do some drastic things in an attempt to escape the downward spiral. We’re talking about selling part of its stake in Mitsubishi, reducing production capacity, and laying off 9,000 employees. It’s a lot to digest, so let’s start with capacity.

Nissan now wants to achieve a cost structure that will enable it to achieve profitability even at a global volume of 3.5 million vehicles. That is about 100,000 more than its current sales figure.

To get there, [CEO Makoto] Uchida wants to cut global capacity by 20 percent to bring its global production capacity of 5 million units more in line with its annual sales numbers.

That’s an aggressive target, and it won’t come without hardship. See, Nissan currently employs 133,580 people around the world, and under this plan, 9,000 of those jobs are getting cut. However, they might not all be getting cut rapidly, as some might be slowly packaged out.

Uchida declined to give a timeline for the payroll reductions or production cuts, or say where they would take effect. Some of the cutbacks would come through voluntary separation programs, as Nissan recently did by offering buyout packages to white collar workers in the U.S.

In addition to slicing its workforce and reducing its production capacity, Nissan reportedly plans on raising some money by selling about a third of its stake in Mitsubishi to…Mitsubishi?

The holding will be bought back by Mitsubishi and amounts to 10.02 percent of its total shares. Nissan said it was selling the stake to support Mitsubishi’s shareholder value strategy as well as to enhance “Nissan’s financial flexibility” and open the door to “growth opportunities.”

At the reported sale price of ¥460.6 ($3.24) per share, the disposal of the 149.03 million shares in Mitsubishi would net Nissan around ¥68.64 billion ($482.65 million).

First of all, it’s kind of amazing that Mitsubishi has $482.65 million to throw around at share buybacks. Secondly, oh how the tables turn. A few years ago, Mitsubishi was in a bad way, with a fuel economy scandal forcing the brand to cling to Nissan to survive. In the time since, Mitsubishi seems to have made out okay with Renault-Nissan platforms, and now Nissan’s the struggling brand.

This isn’t the first time Nissan’s had its back against the wall. Back in the late 1990s, Nissan was drowning in red ink, and it took Renault stepping in to save the firm. The bulk of the problem? As the Los Angeles Times reported in 1999:

“Nissan lost touch with the market,” said George Peterson, president of AutoPacific Inc. in Santa Ana and a former Nissan executive. “It became very conservative. Instead of being entrepreneurial, Nissan went into a shell.”

Indeed, over the past few years, we’ve seen similarly conservative product decisions from the brand. A massive EV lead largely squandered. Zero hybrids currently on sale in America. Aging platforms like the FM architecture under the new Z, or the F-Alpha platform underneath the Frontier, both dating back more than 20 years. Cuts and efficiencies are only one half of building a sustainable future — the other is product. While the incoming Rogue Hybrid and plug-in hybrid will likely help, there’s still a long way to go.

It’s Getting Brutal At Audi

Nissan isn’t the only automaker planning on laying off workers. According to Germany’s Manager Magazin, Audi is planning on cutting thousands of jobs outside the factory floor, in addition to its plans of closing a plant in Brussels and wiping out 3,000 jobs there. As the publication writes:

 In the medium term, the company says that jobs will be cut mainly in the indirect sector, with more than 2000 jobs at stake in development alone. Indirect sector means all those who do not work directly in production. According to Audi figures, there were around 30,000 in Germany at the end of June. The target in the indirect sector is a reduction of around 15 percent, according to Audi management. That would be around 4500 jobs in the indirect sector in Germany alone

For context, in this case, “indirect sector” workers include those in research and development roles — you know, the stuff people buy German luxury cars for. Interestingly though, Manager Magazin states “There are to be no layoffs,” which means its possible this shedding of jobs could be a slow burn as employees get packaged out or retire. So, where does the blame lie here? Well, between new models being held up by Volkswagen Group’s CARIAD software subsidiary, middling demand for some new electric models like the Q6, and reports of high-margin performance models having to be re-worked, it appears there’s lots of reprobation to go around, mostly in C-suites.

It’s Getting Even More Brutal At Stellantis

Oh, and the bloodbath continues, this time at Stellantis. Last night, the Detroit Free Press reported that Stellantis is cutting a shift in its Toledo Assembly Complex, resulting in the layoffs of 1,100 union employees. Some Christmas present, huh?

The automaker, which owns the Jeep, Ram, Chrysler, Dodge and Fiat brands, announced the job cuts Wednesday, which will be effective Jan. 5. It framed the layoffs as part of the effort to reduce its inventory levels, one of the many issues that have plagued the company this year.

The company said it has issued Worker Adjustment and Retraining Notification notices to state and local governments as well as the UAW.

The Toledo Complex in Ohio builds the Jeep Gladiator and Wrangler, arguably the two most-Jeep Jeeps you can buy from a Jeep showroom. However, with strong pricing combined with added competition, these models haven’t exactly been shifting the way Stellantis hoped. Wrangler sales were down 14 percent in the third quarter compared to Q3 of 2023, while Q3 Gladiator sales were down a whopping 35 percent compared to Q3 of 2023. As such, it seems that Stellantis is cutting a shift in order to reduce inventory, but that rationale doesn’t make things any better for the 1,100 workers affected indefinitely.

BYD Pauses Its Canadian Plans

A few months ago, Chinese automaker BYD was looking at sending affordable electric vehicles to Canada, and at the time, it made a ton of sense. Canada has an electrification mandate in place for 2035, the most popular passenger cars in the country are typically reasonably priced compacts, and cheap EVs need to come from somewhere, right? Well, that was before legislation broke out a big stick. As Automotive News reports, BYD has now hit freeze on its plans to sell cheap Chinese EVs in Canada. The only question now is, with tariffs announced months ago, what did it take so long for?

Over the summer, the company met with dealers across Canada on establishing a possible distribution network and engaged lobbyists to advise the federal and Ontario governments on the “expected market entry of BYD into Canada for the sale of passenger electric vehicles.”

But Ottawa’s move Aug. 26 to follow suit with the United States in imposing punishing tariffs on EV imports from China coincided with the end of BYD’s dialogue with government, public filings show. And talks with would-be distributors are now in a holding pattern, according to dealers and industry sources with knowledge of the matter, but who spoke on the condition of anonymity.

Yeah, no kidding. Even in the case of dirt-cheap models like the Seagull, a 106 percent tariff would push pricing dangerously close to what shoppers on a budget are actually looking at — a damn used car. If you can live with a certain aroma, you can pick up a used Tesla Model 3 for the same price as a gently used Corolla, and that already comes with native access to the best coast-to-coast DC fast charging network in North America. Is there a non-zero chance a cheap Chinese EV could be better built than an early Model 3? Absolutely, but with a network of third-party spares for things like suspension components already built out, buying what’s already common makes sense.

What I’m Listening To While Writing TMD

Look, it’s been a weird week, and when the going gets weird, the music does too. Thankfully, California-based duo The Hellp released a new album about two weeks ago, and it just hits the spot for weird new electroclash. There’s an undertone of anxiety to the slightly scatterbrained project called “LL”, with everything from New Rave to ambient to straight-up indie pop on the sonic palette. Here’s one of the more energetic tracks on the project, “Rllynice”.

The Big Question

With Nissan, Audi, and Stellantis all announcing workforce reductions, who’s next?

(Photo credits: Nissan, Audi, Jeep, BYD)