Autoliv CFO warns of looming labor challenge

Autoliv Chief Financial Officer Fredrik Westin says labor shortages that have plagued several industries -- think understaffed airports that were unprepared for the massive return of travelers -- could cause trouble in the automotive sector.

"In Europe, the orders from our customers are quite positive. Therefore, it's not just going to be a challenge when it comes to component availability but also labor availability. That will be one of our focus areas here in the near term to secure the labor that will be needed to fulfill these potential volume requirements for our customers," Westin told Automotive News Europe. 

Autoliv reduced its headcount by 7,000 people to about 61,000 workers between the fourth quarter of 2020 and the fourth quarter of 2021. That number grew to more than 64,000 at the end of the second quarter, but that was still thousands of people short of where it was 18 months ago.

When asked to outline specifics of the problem, Westin said: "It has been a continuous challenge during the last couple of quarters to find that balance because you cannot just move people in from one day to the next. You need to train them. You need to make sure that you have the right efficiency and quality performance in your operations. And that has been a constant struggle to really find that balance."

He also said that recent crises such as the pandemic and chip shortage have made Autoliv better at identifying issues earlier than in the past.

"We are monitoring a lot of different signals so that we can indicate risks early so we have more time to react,' he said.

Because of digitalization Autoliv has a number of tools available to track potential troublespots.

"And while they have been around for a while they have matured," he said. "So, you can take a lot of different signals that you get from various sources and put them into your defined risk framework."

But he added that the information is only as good as the person who can digest the data and make the right decisions.

"There is also a maturation process here," he said, "because as a person gains experience reading the signals they make better informed decisions."

"And while they have been around for a while they have matured," he said. "So, you can take a lot of different signals that you get from various sources and put them into your defined risk framework."

But he added that the information is only as good as the person who can digest the data and make the right decisions.

"There is also a maturation process here," he said, "because as a person gains experience reading the signals they make better informed decisions."

He said there is one area in particular where digital tools have helped: inventory management.  

"Because you get a deeper understanding of what the inflow and outflows are you can make better judgment calls," he said. "While the overall volatility is still very high, had we not had these tools, we would not be able to operate at the efficiency we are at now. It would be much worse."