Dana Incorporated, a leading automotive supplier, is set to reduce its workforce by 200 jobs at its Three Rivers, Michigan facility. This decision comes as a direct response to a significant decline in electric vehicle (EV) orders from major clients such as Ford and General Motors, which have dropped by over 30% since early 2023. The layoffs, primarily affecting assembly and engineering roles, are scheduled to commence in November 2023, highlighting the broader challenges faced by the EV industry amid high interest rates and persistent supply chain disruptions.
Dana’s Announcement and Immediate Impact
The announcement of the job cuts was confirmed by Dana’s spokesperson, Tim King, on October 10, 2023. The layoffs will target non-union positions at the Three Rivers plant, affecting 150 assembly line workers and 50 engineers. According to the layoff notice filed under Michigan’s WARN Act, affected employees will receive severance packages that include up to 12 weeks of pay and six months of benefits continuation. This move has raised concerns among local union representatives, including Sarah Lopez of UAW Local 969, who noted the abruptness of the decision, especially for workers trained specifically for EV drivetrain production.
Decline in EV Orders Driving the Cuts
The reduction in EV orders from key clients has been a significant factor in Dana’s decision to cut jobs. Ford Motor Company decreased its EV component orders by 25% in the third quarter of 2023, attributing the cut to weaker consumer demand for models like the F-150 Lightning. Similarly, General Motors reduced its orders by 35%, impacting Dana’s supply of electric axle systems. This decline is linked to excess inventory at dealerships as of September 2023. Industry analyst Mark Johnson from BloombergNEF has pointed to rising battery costs and a consumer shift back toward hybrid vehicles as primary reasons for the overall 30%+ drop in EV orders, which has directly affected suppliers like Dana.
Broader Implications for Michigan’s Auto Sector
The layoffs at Dana are part of a larger trend of job losses in Michigan’s auto sector, which has seen over 1,500 positions eliminated statewide in 2023. The cuts at Dana’s Three Rivers facility, which employs 800 workers, will further strain the local economy in St. Joseph County. In response, Michigan Governor Gretchen Whitmer has committed up to $500,000 in state retraining funds for displaced workers through the Going PRO Talent Fund. Economic forecaster Dr. Elena Vasquez has warned that continued softness in EV orders could lead to additional job cuts at nearby suppliers, such as BorgWarner in Auburn Hills, potentially resulting in a 5% decline in regional manufacturing output by mid-2024.
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Grant Mercer covers market dynamics, business trends, and the economic forces driving growth across industries. His analysis connects macro movements with real-world implications for investors, entrepreneurs, and professionals. Through his work at The Daily Overview, Grant helps readers understand how markets function and where opportunities may emerge.
