More than 1 million car industry workers in the EU affected by plant closures

Jill Petzinger
Jill Petzinger, Germany Correspondent, Yahoo Finance UK
Recently assembled Vauxhall cars in the distribution yard at the Vauxhall car factory in Ellesmere Port, England. (Christopher Furlong/Getty Images)

At least 1.1 million workers in the European Union’s car manufacturing sector have been affected by the shutdown of car plants due to coronavirus, according to the European Automobile Manufacturers’ Association (ACEA).

Those affected work directly for car, truck, van and bus manufacturers, the ACEA said, making the impact on supply chains even more drastic.

“Right now, the primary concern of ACEA and all its members is to manage the immediate crisis facing the auto industry, which has essentially come to an abrupt halt – something the sector has never experienced before,” Eric-Mark Huitema, ACEA director general said in a statement.

The EU automotive industry provides some 2.6 million manufacturing jobs at 229 vehicle assembly and production plants across the bloc. The broader automotive sector accounts for 13.8 million EU jobs.

Europe’s biggest car companies began to temporarily suspend production at factories two weeks ago, as they struggled to maintain their supply chains. Demand plummeted too, as people put off car purchases amid massive economic uncertainty.

Initially, carmakers planned to idle plants for 16 days, but it is not entirely clear when they will restart. It will depend on national government restrictions and what safety measures they can implement to protect workers.

German car giants Volkswagen (VOW.DE), Daimler (DAI.DE), and BMW said they are putting hundreds of thousands of workers on short-hours, or sending them home in case of plant closures. 

Volkswagen chief executive Herbert Diess said on German TV this week that the company is burning through €2bn (£1.7bn, $2.1bn) in fixed costs per week with plants closed, and it is barely making any sales outside China. He noted that factories were reopening in China, which has passed the peak of the coronavirus pandemic.

Read more: VW and Daimler to put tens of thousands onto reduced hours as plants close

The car industry body said today that the plant closures have caused production losses of over 1.2 million vehicles so far, losses that are set to soar much higher if companies are not able to restart their factories in the next week or two. 

ACEA data shows that the European Union auto industry accounts for just over 6% of all jobs in the bloc, and over 11% of all manufacturing jobs – some 3.5 million. The sector’s turnover makes up 7% of EU GDP, and it generates an annual trade surplus of over €84bn for the EU.