Despite strong profits, General Motors has decided to trim thousands of salaried positions, pause a number of capital improvement projects and make other cost cuts.
Ford also seems to be preparing to take a hatchet to its expenditures, though details of its plans haven't been laid out.
Only hindsight will prove if the cuts were the prudent moves of a cautious management team determined to protect the hard-won financial gains of the past decade, or the jittery reaction to a capricious stock market.
Motivations aside, it's natural to wonder when the next downturn will come and how best to prepare for it. But while cost controls might telegraph prudence — especially to investors — they also carry great risk, depending on the timing and scope.
This industry demands many things, but for successful automakers, few jobs on their payroll are as important as the designers and engineers who both dream of tomorrow's cars, SUVs and pickups, and make them happen. They are the lifeblood of any automaker — the people whose technical prowess and artistic flair fan passion for automobiles and ensure that they remain more than just appliances.
Yet too often, automakers facing a looming downturn have been too quick to sacrifice their engineering and designer ranks on an altar of analyst expectations. These sacrifices become the compromises that show up in vehicles as bland designs, wasteful powertrains and harsh rides.
This strategy is almost always a mistake. But it is especially shortsighted now.
The engineering challenges facing the industry are growing exponentially as automakers seek to transition from sedans and coupes to larger vehicles with as little fuel efficiency loss as possible.
Automakers also have to have an answer — even if it's one licensed from a rival — for electrification of powertrains and the dawn of autonomous mobility.
Another downturn will come. Automakers should prepare for it. But they need to do so surgically and strategically, being careful not to sacrifice their future by cutting too close to the bone.