Automakers have widespread shutdowns planned for the summer to adjust to the U.S. car market’s recent slowdown. As shown below, in April auto sales contracted in the three largest global markets, for the first time since the 2008-09 recession. The sales downturn is consistent with the negative trend in global debt impulse seen year to date.
It also conflicts directly with upbeat projections on consumer spending and the state of the world economy, now 8 years since the last recession. See: Motown slowdown runs counter to Trump touting automotive growth:
“We are continuing our intense focus on cost and the reason for that is not only mindful of the current environment that we’re in, but also I think preparing us even more for a downturn scenario,” Fields said on April 27.
In the U.S., Ford has about 30,000 salaried workers. The company employed a total of about 201,000 workers as of the end of last year, including about 101,000 in North America, according to a regulatory filing.
“It’s sad to see jobs disappear when the company is still doing well. But you should do it when you identify the need,” Whiston said. “If you wait until the recession happens, you’re just delaying the inevitable.”
This last sentence offers wise words for consumers, business owners and investors alike. Recessions and bear markets are a normal part of every business cycle, the time to take defensive action–liking lowering debt and risk, while building up cash–is during the expansion, not after the recession has already hit and revenues and asset prices have imploded.
