Over 2,000 employees at Honda Motor have applied for early retirement, as the Japanese automaker restructures its workforce to gear up to make more electric vehicles.
Honda’s move is the latest in the trend among automakers to move away from the production and sales of internal combustion engines. Those employees account for around 5% of Honda’s full-time staff in Japan. Although Honda had not set a target, the number of applications has far exceeded its initial estimate of 1,000.
Honda’s move is part of plans to reduce reliance on older staff as it speeds up the development of electrification and autonomous driving. In the longer term, the early retirement program will reduce fixed costs and improve profitability as its expenses in research and development increase due to the shift to EVs. It announced in April that it plans to sell only new EVs and fuel-cell vehicles by 2040.
Source: Nikkei Asia
PSR Analysis: Various estimates have been made about the decrease in employment due to the shift to EVs, and in the case of Japan, it is said that 100,000 to 300,000 jobs will be lost. It is expected that many manufacturers and local governments will need to recruit early retirees and to create new businesses and take initiatives to maintain and increase work opportunities.
Although the situation is very different from the EV shift, there are also efforts to maintain employment regarding the COVID-19 issue. Airlines have been transferring surplus airport staff and flight attendants to consumer electronics stores and other service industries.
For more than a decade, the shrinking number of jobs associated with the shift to EVs has been recognized, but many manufacturers have been unable to find a drastic solution. Not only Honda, but also Nissan has announced plans to cut 10,000 jobs globally in 2019. Toyota has traditionally placed a high priority on employment and has not issued a clear plan to reduce the workforce at its group companies.
Some EV development sites are saying that they cannot proceed with their plans smoothly due to lack of manpower for development. On the other hand, the staff of the internal combustion engine division, who are gradually losing their jobs, express their concerns about the future. We know that there is no easy solution to this problem, but there is not much time left to solve it. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
