Safety products supplier Autoliv will cut 8,000 jobs, close European sites

STOCKHOLM -- Global auto supplier Autoliv said it is speeding up cost cuts, mainly in Europe, expecting to cut 6,000 direct jobs or 11 percent of its workforce along with another 2,000 indirect jobs.

The world's biggest maker of airbags and seatbelts said in a statement on Thursday that the measures across its operations included the closure of several sites in Europe, and it expected the new initiatives to be fully implemented by 2025. The 2,000 indirect job cuts include people not working directly on production lines.

"These initiatives will continue to optimize our geographic footprint for a more effective structure," CEO Mikael Bratt said. "We intend to simplify and consolidate how we operate in all areas."

There are no plans to close any U.S. plants.

"In the U.S. we will continue to scrutinize the business and reduce structural costs, which could lead to some positions being eliminate across functions over the next 18 months, but we don’t foresee significant reductions in the U.S.," the company said in a statement from its U.S. headquarters.

Auto suppliers have been hit by soaring raw material prices. Autoliv in January said cost inflation in 2022 was the worst in three decades, and that it was seeking to pass those costs on.

"The company continues to negotiate with its customers to secure pricing that reflects the extraordinary inflation and corrects structural price gaps," Bratt said on Thursday.

"The highest priority and greatest challenge are the customer negotiations in Europe."

Autoliv said in January cost inflation in 2022 was the worst in three decades, and that it sought to pass those costs on.

Bratt told Reuters it was price negotiations with customers based in Europe that were the most challenging, a region that has high inflation and a tough macroeconomic environment.

"What takes time is that these negotiations are very detailed, it is basically component by component, plant by plant, as we go through this," he said.

Sweden's Autoliv, whose rivals include ZF and Joyson Safety Systems, reiterated a full-year outlook given in April for a widening of its adjusted operating margin to around 8.5 to 9.0 percent.

Autoliv ranks No. 30 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $8.2 billion in 2021.