The worrying evolution of employment in [France's] automotive industry (2019/09/01)

Toyota announced on August 28 that it would recruit 500 people at its Onnaing site. These new recruits will increase the workforce to 4,500 employees and correspond to the €300 million investment announced at the beginning of 2018 to increase the site's production capacity to 300,000 vehicles per year. Management indicates that the number of employees has increased from 2,938 in January 2018 to 3,150 today, with a target of 3,600 by the end of 2020.
We can deduce that the number of fixed-term and temporary employees is 850 and will be 900 by the end of 2020. Quite the opposite, in April at PSA's Mulhouse site, we learned that about a thousand jobs, mainly temporary jobs, would be cut by the end of 2019, due to the shutdown of the small SUV Peugeot 2008 production at the site, which in mid-October will result in the termination of the night shift employing 960 people.
The PSA Mulhouse plant employing 5300 permanent employees and 1300 temporary workers, the reduction in the workforce is not expected to result in any firm layoffs. Even if the drop in activity and headcount must be temporary since, for Mulhouse too, an investment of just over 300 million is planned, the refocusing of the plant on medium-high end "EMP2 Sedan" - Sochaux and Rennes dealing with "EMP2 SUV" - could eventually result in lower production volumes than those achieved with the Peugeot 2008.
In terms of staff, as L. Bodin put it in Les DernièresNouvellesd'Alsace, "in 2012, the site had 8,500 PSA employees and 12,000 people, plus temporary workers and service providers". Its workforce at the end of 2017 was only 7138 people (including 5700 permanent employees, 78 temporary employees on permanent contracts, 10 fixed-term contracts and 1,350 temporary employees) and had fallen by 400 in 2018, to 6700 people, including 1,353 temporary employees. By the beginning of 2020, we will be well below 6000.

 

At Flins, in a somewhat similar way, the Clio 5 goes away and will no longer come - like the Clio 4 - to "load" the site which only assembles the Micra, which sells very poorly, and the Zoé, which sells better and better but only represented 40,000 units in 2018, and should see its sales triple to compensate for the loss of Clio and the difference between Micra's expected European sales (100 to 130,000 per year) and actual sales (72,600 in 2018, around 50,000 this year). The 4,500 employees are therefore worried and it is once again the many temporary workers who will ensure the adjustment.

 

Douai, which assembles the Talisman, Espace and Scenic models, which sold more than 150,000 units in 2018, will have fallen below 100,000 by the end of the year due to the low sales of the three models. Temporary work is adjusting but employment dynamics are clearly declining.

 

Indeed, as Les Echos pointed out on 26 August, the "core" of the automotive industry, which consists of the activities of carmakers and equipment manufacturers, now corresponds to 210,000 people (186,000 excluding temporary workers) compared with 330,000 in 2004.
PSA employs 47,000 and Renault 31,000. At the end of 2017, suppliers claimed just over 70,000 (compared to 114,000 in 2007). Between 2004 and 2013, the decrease in headcount was mainly due to the decrease in production. Since 2013, production has been on the rise again since, according to the CCFA, the production of light vehicles in France, which had only been 1.736 million vehicles, was 2.226 million in 2017. Nevertheless, productivity improved considerably: manufacturers had not, despite their social plans, adjusted their workforce to the decline in production, and output per person employed had fallen in 2013 to 13.3 vehicles; by 2017, it had reached 19.9. The 500,000 cars produced in addition corresponded to an 18,000-person reduction in the workforce in the car industry, partially offset by the temporary workforce.

 

Similarly, the recovery in production has had relatively little impact on employment in automotive equipment since, between 2013 and 2017, the workforce fell by a further 6,000 people while turnover rose from €20 billion to €26 billion: the value added per employee rose from €60,000 to €80,000.
From this year and, a fortiori, in the coming years, this negative dynamic for employment will be doubly accentuated.

 

First, as indicated last week, production will fall because European demand will be lower first and foremost because PSA and Renault have confirmed their choice - opposite to Toyota's - to deprive French sites of B-segment vehicles. The "high-end mid-range" will not compensate for this loss any more than it has in recent years and the fact that the assembly of electric or hybrid vehicles is predominantly French will struggle to offer industry an alternative.

 

Then, as the sector tries to anticipate through the PFA (Plate-Forme Automobile - a taskforce set up by the government to coordinate public policies and industrial players) and the metallurgy observatory, the technological content and - therefore - the employment and skills content of the assembled vehicles is changing quantitatively and qualitatively. Quantitatively, everything suggests that, as we already see through the consequences of de-dieselization, the direct and - above all - indirect work content of vehicles is likely to decrease with electrification. Qualitatively, empowerment and electrification require skills that, like what is happening with Li-ion batteries, may be more prevalent outside France.

 

One can also hope that the technological choices of manufacturers and the mobilization of the sector are finally organized around clear objectives of re-industrialization and national control of the promoted technologies.

 

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