Transforming the Automotive Workforce for the Future

For the world’s automotive industry, it is the best of times. And the worst of times.

Consumer demand and government restrictions on gasoline-powered vehicles has driven a huge expansion in the Electric Vehicle (EV) market that is producing new and potentially attractive employment opportunities.

At the same time, however, supply chain problems and concerns about shortages of precious metals needed to make computer chips, and an equally impactful shortage of nickel needed to make EV batteries, have left the industry reeling.

Put it all together and you have an industry with great promise – both for consumers and workers – that is still laboring under a cloud of uncertainty.

However, while commodity and semiconductor shortages create challenges now, the main long-term challenge remains unchanged: how will the automotive industry find the skilled workers to help facilitate this unprecedented transformation?

That is the main motivation behind a major summit of European stakeholders later this month.

The European Automotive Skills Alliance will be holding its first-ever conference in Stuttgart, Germany – Skills in Continuous Transition? – on September 29 and 30, 2022. The event will bring together industry stakeholders to develop ideas and strategies to further the sector's skills transformation. The conference will look for ways to reconcile the challenges of transitioning human capital in an industry that is undergoing huge technological change.

There certainly have been growing pains early on. Some auto makers, such as Ford, have already signaled they will be reducing the headcount at their factories because EVs require up to 40 percent less manual labor to build. EVs require dramatically fewer parts – particularly in engines and transmissions – and a manufacturing process that is dominated by automation.

In June, Ford confirmed it may have to lay off 8,000 workers as it winds up production of internal combustion engine (ICE) vehicles. It’s not an entirely unexpected development; the U.S.-based Economic Policy Institute released a study this month that said the U.S. alone could lose up to 75,000 jobs in automotive production by 2030 if – and it’s a big if – EVs account for 50 percent of total vehicle sales.

The shortages of precious metals for batteries and semiconductors may slow the growth of the industry, with some sources estimating these challenges – which have slowed the supply of EVs – will extend well into 2023. A recent impact study published by the European Association of Automotive Suppliers CLEPA – lays out three workforce impact scenarios, of which two – not the one favoring radical technology shift – foresees an increase in workforce demand prior to decelerating.

The challenge for lawmakers and manufacturers alike is how to transition workers from vehicle production into the ancillary industries that support EVs while maintaining margins and production levels in the short term.

In the U.S., for example, President Joe Biden recently got Congressional approval for the CHIPS and Science Bill that, among other things, will free up $52 billion dollars to support the development and production of computer chips, with billions more for EV and battery production. Those investments are expected to eventually create additional jobs but it’s unclear whether they will be as lucrative as jobs making automobiles.

The EV industry has such tremendous potential, both for the global labor market and for the global climate. However, it will be a constant challenge for governments and auto makers to find ways of mobilizing human capital to support this seismic technological shift.

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Download the latest report, Global Labor Market Insights - July-August 2022, for news on the global labor market and industry developments.

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As a founding member of the Automotive Skills Alliance, the Adecco Group is hoping to drive more research and discussion about how best to transition human capital into new and emerging industries. You can register for the skills conference by visiting this link.