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Illustration: Sarah Grillo/Axios

Carmakers are in a tough spot: Global auto sales are slowing faster than they can reinvent themselves as transportation service providers.

Why it matters: It will be years before investments in new technologies like electric, self-driving cars pay off — if ever. With sales stagnating in major markets like the U.S. and China, and traditional sources of revenue drying up, carmakers are slashing fixed costs and contemplating their place in the new order.

Driving the news: Ford is the latest automaker to announce layoffs, this time in Europe, as part of a broader corporate restructuring that aims to slash $25.5 billion in operating costs over the next few years.

  • Ford said it would cut 12,000 jobs, close 5 plants, and trim shifts at 2 other factories throughout Europe.
  • The announcement follows news in May that it would eliminate 7,000 salaried positions worldwide.
  • Ford is hardly alone. GM, Nissan, Honda, Daimler, Tesla, Fiat Chrysler, Jaguar Land Rover and Audi have all announced job reductions in the past 6 months, totaling at least 38,000 people, Bloomberg reports. And more cuts are likely.

What they're saying: "The industry is right now staring down the barrel of what we think is going to be a significant downturn," Bank of America Merrill Lynch analyst John Murphy said at a recent Detroit forum, adding that the pace of decline in China "is a real surprise," per Bloomberg.

  • The timing couldn't be worse, just as companies are ramping up spending on new technologies — $225 billion on electrification between now and 2023, and another $85 billion on autonomous vehicles, says global consulting firm AlixPartners.
  • Industry profits began falling in 2017, and return on capital employed is shrinking toward levels not seen since the Great Recession, a studyfrom the firm found.
  • Mark Wakefield, co-leader of AlixPartner's automotive and industrial practice, warns of a "multi-year profit desert" the industry will have to crawl through.

What to watch: In the midst of the turmoil, automakers need to figure out what role they will play in the new transportation ecosystem, Wakefield tells Axios.

  • The largest players will likely continue to invest heavily in EVs and AVs in hopes of dominating the field in a winner-take-all fight, he says.
  • Others will be more strategic, putting together pieces of the mobility puzzle with partnerships but not controlling the game.
  • "Your starting position matters," Wakefield says. "Big OEMs want to play a bigger role. Smaller companies are willing to sell pick axes to gold miners."

Go deeper: Billion-dollar bets on electric vehicles await payoff

Go deeper

Updated 26 mins ago - World

Fatal stabbing of British MP David Amess declared a terrorist incident

Police outside Belfairs Methodist Church in Leigh-on-Sea, England, on Oct. 15. Photo: John Keeble/Getty Images

Authorities have declared the death of David Amess a terrorist incident, hours after the Conservative Party lawmaker in the U.K. was fatally stabbed while meeting with local constituents in a church in eastern England on Friday.

The big picture: The Metropolitan Police has found "a potential motivation linked to Islamist extremism."

Biden: DOJ should prosecute those who defy Jan. 6 subpoenas

President Biden speaks with reporters at Bradley International Airport in Windsor Locks, Connecticut. Photo: Brendan Smialowski/AFP via Getty Images

President Biden said Friday that the Justice Department should prosecute those who defy subpoenas from the Jan. 6 select committee.

Why it matters: The president's remarks come one day after Donald Trump ally Steve Bannon failed to show up for a deposition before the committee.

Updated 2 hours ago - Politics & Policy

Bill Clinton hospitalized for non-COVID-related infection

Former President Bill Clinton. Photo: Win McNamee/Pool/AFP via Getty Images

Former President Bill Clinton was admitted to the University of California, Irvine Medical Center on Tuesday for a non-COVID-related infection, his spokesperson Angel Ureña said Thursday.

The latest: In an update on Friday, Ureña said Clinton's health indicators are "trending in the right direction, including his white blood count which has decreased significantly."