World To Be Left With Only 3-4 Auto Manufacturers: Six Million Workers To Lose Their Jobs

“Forced by the US Government into bankruptcy”

Bloomberg:

May 25 (Bloomberg) — As many as 6 million unionized workers may lose their jobs because of the crisis in the automotive industry, according to Marcello Malentacchi, general secretary of the International Metalworkers’ Federation.

“Worldwide, maybe we will lose something between 20 percent to 25 percent of our membership,” Malentacchi said today in an interview in Gothenburg, Sweden. Now that carmakers have completed cutbacks in temporary laborers, “we actually now see permanent workers being hit by the crisis, and we see how quickly these people will be affected.”

The recession has caused a 16 percent drop in European automobile sales this year, and four-month deliveries of cars and light trucks in the U.S. fell 37 percent. Carmakers are responding by slashing manufacturing capacity and jobs and attempting to merge to survive the worst industry crisis since the 1930s.

There will eventually only be three or four major carmakers left worldwide as smaller manufacturers disappear because of the global financial crisis, Malentacchi said. The car market’s contraction is likely to reach its worst at the end of this year, he said.

General Motors Corp., the biggest U.S. carmaker, may be forced by the U.S. government into Chapter 11 protection from creditors by June 1. Auburn Hills, Michigan-based Chrysler LLC is in U.S. government-backed bankruptcy protection as it seeks to combine with Turin, Italy-based Fiat SpA, which is also one of three bidders for GM’s Opel and Vauxhall units in Europe.

GM’s Saab Disposal

GM’s Saab Automobile division, based in Trollhaettan, Sweden, received protection from creditors in February after the U.S. company said it’s cutting ties with the division. Saab said on May 19 that it’s negotiating with three potential buyers and aims to complete a sale by June. As many as 140,000 people in Sweden, a country of 9 million, are directly dependent on carmaking, according to the national metalworkers’ union.

“The whole global automotive industry has to be restructured,” Malentacchi said. “Some of the companies will disappear and some will strengthen. There will be a grouping with fewer companies and more alliances between different companies, including in the supply chain.”

The Geneva-based International Metalworkers’ Federation represents the interests of 25 million manufacturing workers from more than 200 unions in 100 countries. About 800 representatives from around the world, including Sweden, Germany, India and Brazil, are meeting in Gothenburg, the hometown of Ford Motor Co.’s Volvo Cars division.

Delegates at the conference, which is held every four years, elected Jyrki Raina, a Nordic-region union leader from Finland, as its new general secretary today. Malentacchi is stepping down after leading the federation since 1989.