- The seating and wire harness specialist is also looking to drive growth by winning new business from the one group of automakers most likely to grow in the near future: Chinese domestic brands like BYD, Feely, and now Xiaomi.
Auto parts supplier Lear is looking to further reduce headcount this year to protect profits amid a continued decline in vehicle production in North America and Europe.
The Detroit-based company expects the number of hourly workers across its global operations to decline by roughly 8%, or some 15,000 jobs. By the end of 2025, that means a total of 25,000 to 30,000 employees will have left over the past two years, according to management.
“The restructuring investments we are making will drive an additional $55 million of savings in 2025,” CEO Ray Scott told investors during a fourth-quarter earnings call on Thursday.
Lear provides key components like luxury seats and wire harnesses needed for onboard electronics for EVs like the Cadillac Escalade iQL and Polestar 5, as well as numerous combustion-engine models.
But the company needs to downsize amid a broader shift in demand away from legacy carmakers towards Chinese domestic brands like BYD, Geely and now the newest entry, mobile handset maker Xiaomi, which launched its first electric vehicle last year in the stylish SU7.
Mexico export exposure significantly higher than Canada
Global auto industry production is expected to edge 1% lower to 87.4 million vehicles in 2025, but the declines will be heavily concentrated in the West, where Lear still does the bulk of its business.
China by comparison should see a slight increase to 29.3 million—almost as many as the 31.8 million vehicles built in North America, Europe and Africa combined.
As a result, Lear’s priority is to snag more contracts with those car manufacturers, known in industry jargon as OEMs, that are best positioned to deliver growth. Scott expects more than 37% of Lear’s sales in the country this year will stem from Chinese brands, up from about 20% just three years ago.
“Our pipeline of new business with Chinese domestic automakers is strong and growing,” Scott said. “We launched our seats on the Xiaomi SU7 and won new [business] with BYD, Geely, and other Chinese domestic OEMs in seating, as well as Changan and Dongfeng in both seating and E-Systems.”
Lear wouldn’t chance a forecast for the earnings impact of any Trump-related tariffs at this current juncture.
But Scott did reveal its exposure is skewed heavily to Mexico rather than Canada or China, with a total of $2.9 billion in parts exported to the U.S. Versus fewer than $100 million and $20 million, respectively. And, in his view, it’s not just Lear that would be hurt should Trump impose tariffs on Mexico.
“Anything that’s labor-intensive in North America and seating is manufactured in Mexico…that’s going to be the same case for all of our competitors as well.”