DETROIT
– Auto industry layoffs tripled last year to the highest levels since the early
1990s, the Detroit News said in a report published on Wednesday.
It noted that the job cuts, tracked by the Chicago recruiting firm Challenger
Gray & Christmas, illustrate the auto industry’s growing pessimism about
the coming year.
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"Layoffs come when companies foresee a fairly prolonged period of soft
demand – for six months to a year," said David Littmann, chief economist
for Comerica Bank.
According to the Detroit News, the U.S. auto industry announced 85,231 job
cuts in 2000 – up from 27,779 in 1999 – and the biggest cutbacks since Challenger
began compiling the data in 1993. Only the retail sector laid off more employees
last year.
The stream of job cuts has continued in 2001, the paper said. On Tuesday, transmission
systems supplier BorgWarner Inc. said it would cut 200 workers and market research
firm R.L. Polk and Co. sacked 141 staff.
Detroit’s automakers have reduced first-quarter output by a collective 20 percent
while car and truck stocks are at their highest levels in nearly a decade.
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By GlobalDataThe soaring layoffs — more than double industry’s average of 34,271 job cuts
per year since 1993 — show auto companies are determined to stanch their financial
losses.
"The industry has seized the opportunity to cut costs and gain efficiencies,"
Diane Swonk, chief economist at Bank One Corp., told the Detroit News.
She added that the cutbacks will be easier to absorb than in past downturns
because of low unemployment rates and thousands of employees nearing retirement.
