Automotive Seat Giant Global Layoffs! Plastics Help Tier 1 Suppliers Break the "Layoff Curse"

On February 10, Lear Corp., a major American automotive parts supplier, said that after its fourth-quarter revenue and profits fell in 2024, it will lay off 15,000 workers in 2025 and actively promote automation. Similar plans had been put in place by the company last year.

Its adjusted net profit for Q4 2024 fell by 9% to $161 million, and its revenue was $5.7 billion, which was slightly down from 2023, Lear said. Its adjusted net profit for the full year of 2024 was $713 million, and revenue was $23.3 billion, down slightly from 2023.

Like other automotive parts suppliers, Lear could be hit with declining sales and uncertain future project expectations, particularly in North America where automakers are reluctant because of pressing regulatory matters.

Supplier Crisis: Performance Decline Becomes the "New Normal"

Along with Lear, many other Tier 1 suppliers, including Magna, BorgWarner, Faurecia, Valeo, and Aptiv, have seen their fourth-quarter earnings fall as the performance downturn becomes a new normal for many Tier 1 suppliers.

As the competition in the Chinese automotive market has accelerated, as sales have weakened in the major European and American automotive markets, demand for electric vehicles has slowed, multinational suppliers have generally suffered from revenue declines, with many suffering huge profit drops. The downgrade of automotive industry consulting firms J.D. Power and Global Data to 500,000 units, to 88 million, for global light vehicle sales in 2024, follows.

Foreign automakers are experiencing a sharp downturn in key markets, notably China, because of fierce price wars, and suppliers that depend on foreign automakers are hit directly.

The problem has been compounded by the weakness in the North American market. More cautious consumer behavior has been brought about by high prices of new cars and loan costs. Cox Automotive predicts that U.S. new car sales will be 15.7 million in 2024, 1 million fewer than in 2019. The decline in revenue for many suppliers in North America has led to a reduction in Continental's forecast of North American tire replacement business growth rate for 2024 from 0% to 3% to -1% to +2%.

In the European automotive market, new car sales in August and September 2024 started to fall; demand was still weak, particularly for electric vehicles, which have also seen even sharper declines. European automotive production is predicted by Continental to decrease by 4%-6% in 2024.

Third-quarter purchasing activities in 2024 were delayed, especially in North America and Europe, and sales in projects such as General Motors and seats declined, Lear also said.

Moreover, out-of-control costs and supply chain bottlenecks have made the situation worse. However, lots of difficulties such as the cost of raw materials fluctuating, logistics disruptions, and production delays are regular issues and controlling costs becomes a problem. Since then, Tier 1 suppliers have been facing more complexity and uncertainty on their global operations in the face of geopolitical disruptions, increasing trade barriers and higher foreign market entry costs.

The world's biggest supplier of seat belts and air bags, Autoliv, said it would also not have to pay extra for such tariffs and that some automotive suppliers may not live to see the next week, and face financial blow.

Breaking Through the Crisis: Plastics Are Essential

To tackle the enormous challenges in the automotive industry, Lear's management has come up with a "light asset + intelligent" strategy. Analysts, however, note that if Lear does not become a 30% revenue share of the electric vehicle business by 2025 (current 18%), the company could be acquired.

As demand for electric vehicles slows down, supply chain problems and political issues globally, Tier 1 suppliers find a way out. For the sake of example, let's take automotive seats. The global seat market is highly concentrated with the market share of more than 90% held by foreign companies such as Lear, Magna, Toyota Boshoku, Faurecia and Adient, which forms a relatively closed industry structure.

In the trend of the industry development of "intelligent + lightweight + personalization + safety," the company which can occupy these advantages and control costs will break through. Now, we know that plastics can not only help to control the-cost but also realize these advantages.

New optical film materials in terms of intelligence include high performance polarizer films, ultra thin anti glare films and super barrier films. These materials not only add greatly to the functionality of products but also address the increasing need for improved display effects in seat touchscreens. VR, AR, and holographic projection functions have also been developed, and free form surfaces (i.e. reflective lenses) are becoming more popular, which are mainly made of PC plastic, COC, and glass materials, at the same time. Regarding material selection, free-form surfaces are mainly made of optical PC materials.

In terms of light weighting today, the front and rear seat weight of the entire vehicle is 7% of the total vehicle weight. As the automotive seat becomes more complex in the future, this percentage is expected to increase. The replacement of-metal materials with plastics/fibers in seat backrests, surfaces, and other parts has reduced emissions by a large margin, which is attributed to automotive seat light weighting and the concept of carbon reduction and environmental protection.

When it comes to personalization, automotive seats will become lighter, more breathable and safer, and the use of genuine leather seats will gradually decrease. Passengers will feel familiar with many of the materials used, including textiles, wood, marble, and ceramics, which will be shared between automotive and home environments. For instance, feather-light carbon fiber is used in Johnson Controls automotive seats to reduce seat weight, and Renault has developed customized fabric Bloko for automotive seats.

Automotive seats will become part of the passenger protection system and will be integrated with the vehicle's active safety systems in terms of safety. Presently, some car seats integrate various safety technologies such as Pre-Crash seat recovery, Seat Movement Mechanism (FUS), Integrated Seat Belt System (ABTS), Airbag Seat Cushion (BAB), and Headrest Airbag (HAB).

Most of the raw materials for air bags in the industry are PA66 and PET polyester. Different techniques, such as air jet weaving, rapier weaving, and jet weaving, are used to weave PA66 or PET long fibers to obtain plain or jacquard fabrics. The major difference between PA66 and PET airbags is the different performance characteristics of PA66 and PET high-strength fibers. The main difference between PA66 and PET airbags is in the performance characteristics of the materials, and the weaving and stitching process is the same for both. More opportunities for these plastics are created by the addition of Airbag Seat Cushions (BAB) and Headrest Airbags (HAB).

The "key words" for material applications in automotive seats are smart, lightweight, tactile, and high strength, which have opened up very promising opportunities and growth potential for plastic-based materials. The plastics have become a "secret weapon" for Tier 1 suppliers to penetrate the market.

Plastics Revolutionizing the Future of Automotive Seating

The automotive industry sees declining profits, rising material costs and different consumer demands, forcing seat manufacturers to embrace plastics and make them a game changer. The automotive seats of the past have been made of metal and leather, just like most automotive components. But that is changing with the transition towards lightweight, durable, low-cost materials.

Plastics are indispensable in improving seats by maintaining flexibility, customizable features and sustainability. Since traditional materials are being replaced with advanced polymers such as polycarbonate (PC), carbon fiber-reinforced plastics, and thermoplastic composites, seat frames, backrests, and cushioning have begun to use them. Due to these materials, which reduce vehicle weight, then fuel efficiency and emissions are improved, which is in line with global sustainability aspirations.

In addition, plastics are used in the development of intelligent and ergonomic seating solutions. Touch-sensitive displays can be made with high-performance optical films that allow for user interaction within the smart vehicle's interior. A luxurious feel is provided by soft-touch plastic materials, and innovations in plastic injection molding solution make it possible to have seamless, stylish seat designs with embedded electronics.

Plastics also make a difference in the area of safety. High strength PA66 and PET fibers are used in airbag integrated seats to provide better passenger protection. Plastic components that are crash resistant add stability and durability to the seat in case of impact, which means that the vehicle is safer in general.

With economic challenges and increased competition facing Tier 1 suppliers, plastic-based solutions can be used to drive innovation, reduce costs, and provide high-performance seating systems. Plastics enable the ability to merge attractive, lightweight design, smart technology, and safety advances into automotive seating and present a competitive edge in the future of automotive seating.

Conclusion

One of the traditional automotive suppliers that has to go through 'streamlining adjustments' to transform is layoff. Not only do they show that traditional automotive supply chains were subject to survival pressures, but they also demonstrate that the global automotive industry encountered a structural crisis as it transitioned.

The predicament that Lear faces is similar to the problems that the current automotive industry is experiencing. However, all of Bosch, Magna, and other Tier 1 suppliers' net profits have dropped by an average of 18% in 2024, and the industry finds itself in an awkward situation of increased revenue but lower profits.

In the face of electrification and intelligence trends, companies must make breakthroughs through technological innovation to keep themselves in the competition. Otherwise, they will be gone out of the market by fierce competition. In 2025, that may be a crucial year for the 400,000 automotive parts companies around the world. Not the largest companies, but the ones that survive will be the most flexible and adaptable companies.

Against this background automotive suppliers are actively looking for a way to break through. Vehicle manufacturing and automotive parts manufacturing are widely developed for plastics with lightweight, high performance, and low cost. Injection molding services are not the only way to cut overall research and production costs, but they do offer critical support to Tier 1 suppliers to find breakthrough opportunities in a very complex market.