German automotive manufacturers are shedding temporary and contract workers and have begun asking their permanent employees to balance out accumulated overtime. “The automotive industry won’t see a recovery before 2010,” predicts Stefan Bratzel, head of the Center of Automotive (www.center-of-automotive.de) at the University of Applied Sciences (Fachhochschule der Wirtschaft, FHDW) in Bergisch Gladbach / Germany. Until then, things could become very uncomfortable. The next big step will be short-time working, says Bratzel. Once these possibilities have been exhausted, which may happen by the end of 2008, especially if the slump in the car market continues – redundancies are on the cards, and both manufacturers and suppliers will be affected.

In the US, GM boss Rick Wagoner was ridiculed for his attempt to take over ailing competitor Chrysler. It is not clear what he was attempting to achieve, but it is feasible that GM could add the Chrysler, Jeep and Dodge brands to its portfolio then close Chrysler factories, thus taking capacity out of the market. Thousands of workers in the US could lose their jobs in the process.

Automotive expert Ferdinand Dudenhöffer, professor of automotive economics at the University of Duisburg-Essen in Germany, has forecast a similar dire scenario for the German automotive sector – see Plasteurope.com of 31.10.2008, due in part to OEMs shifting production and development activities out of the country. Even before the international finance crisis came calling, Dudenhöffer predicted that up to 20,000 jobs could be lost in automotive production over the next five years. Thís could have a massive knock-on effect. The consensus in the industry is that every lost job in car manufacturing leads to four lost jobs at OEM suppliers.