TPT January 2009

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From the AmericaS
January 2009 86 ›
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TheWorld of Tube & Pipe Products,Materials &Ancillaries
January 2009
Citing general economic stress and growing concerns about credit
availability, Power (Agoura Hills, California) forecast US sales
dropping by another 400,000 cars and light trucks, or 3 per cent, to
13.2 million units in 2009.
What the gloomy outlook might mean for Canadian suppliers to
the auto industry was addressed by Gerald Fedchun, president of
the Automotive Parts Manufacturers’ Association of Canada. He
said flatly that many companies – already contending with higher
energy and commodity costs, stiffer offshore competition, and a
soaring currency that makes exports more expensive – would not
survive.
“Particularly smaller ones that rely on the US simply won’t be
able to make it if they have to wait that long,” Mr Fedchun told
the Toronto Star, in reference to the JD Power prediction that any
pronounced recovery in the global auto market lies at least 18
months down the road.
“So many are already at risk or on the edge,” Mr Fedchun told the
Star’s business reporter Tony Van Alphen, in the struggling industrial
city of Windsor (Ontario) – across the river from Detroit. “We had
expected it would be ten months to a year before things would turn
around, but 18 months would be far more than they could take.”
(‘Auto Sector May ‘Collapse’,’ 10 October).
Mr Van Alphen, noting that Canada exports more than 80 per cent
of its auto output and 60 per cent of parts production to the US,
wrote that auto makers in Canada have been scheduling more
weeks of downtime and cuts in shifts. He reported that Ford and
Toyota canceled new shifts before they started. And General Motors
Corp. plans to phase out production altogether at a truck plant in
Oshawa.
In other automotive news . . .
› General Motors has said it may sell its ACDelco parts business,
based in Grand Blanc, Michigan, as part of an effort to raise as
much as $4 billion through asset sales. Merrill Lynch has been hired
to assist in the possible sale, GM said in a statement 23 October.
The largest US auto maker may also shed its medium-duty truck
business, its Hummer brand, and a parts plant in France.
› Daimler AG, the world’s largest maker of heavy vehicles and the
largest German company by revenue, on 14 October announced
plans to eliminate its Sterling truck brand and shift production from
the US to Mexico, actions that will cut some 3,500 jobs in Canada and
the United States. According to the Canadian Auto Workers union,
which represents employees at a Sterling factory in St. Thomas,
Ontario, about 1,300 workers will be let go when the plant is closed
in March. Stuttgart-based Daimler will also move production of most
Western Star brand trucks from Portland, Oregon, to Santiago,
Mexico, in June 2010.
Andreas Renschler, who heads Daimler Trucks, said that about
88,000 heavy trucks had been idled in the US since January 2008,
an indication of a significant and perhaps permanent change in the
industry. “It would be bad leadership to ignore today’s economic
realities,” Mr Renschler said in a conference call with analysts and
the press, reported in the New York Times (15 October). “It’s a
whole new game now.”