EoW March 2009

Transat lant ic Cable

an engineering site in Millbrook. Also in November, the American auto giant said it would sell its 3.02% stake in Suzuki Motor Corp, of Japan, for $230 million. Honda Motor has said that it will further cut vehicle production in North America as it adjusts to plunging auto demand but would not lay off workers at the affected plants. The cuts are to take place at five of Honda’s seven plants in the US and Canada. The Japanese carmaker said it would reduce production by an additional 119,000 vehicles for its fiscal year ending 31 st March, bringing expected North American production to 1.3 million units. The latest production cuts come on top of previous reductions totalling 56,000 vehicles. Car parts maker Delphi Corp (Troy, Michigan) has suspended work at a factory in China, citing shrinking demand. The plant, located west of Shanghai in the city of Suzhou, makes compressors for General Motors Corp (Detroit). The South China Morning Post for 29 th December quoted from a Delphi internal document: “The sudden and unprecedented decline in (car) sales globally has resulted in our only customer, General Motors North America, announcing plant closures and plant stoppages. Unfortunately our only customer in 2009 is GMNA, and this has placed the Suzhou compressor plant in a very dangerous position.” Delphi, a former subsidiary of GM, filed for bankruptcy in October 2005. It has more than $500 million in mainland Chinese assets, according to the Hong Kong-based Post. Automotive industry forecaster JD Power & Associates (Westlake Village, California) says that US car owners, unnerved by the worsening labour market, are holding on to their old autos longer, with consequent threat to a domestic car industry already at a 16-year low in sales. The average transaction price of a new vehicle was $26,743 in December 2008, almost 6% lower than a year earlier, according to Power. Apparently, those Americans who are buying cars have reverted to some bad habits. As reported on CNNMoney.com, trucks and SUVs (sports utility vehicles) outsold cars in the US in December, for the first time since February 2008. The information on the “re-igniting [of] America’s taste for big vehicles” was provided by researchers at automotive website Edmunds.com, who also forecast that sales of hybrid vehicles would be well down for the month. Michelle Krebs, a senior editor with Edmunds, wrote on 29 th December: “Despite public discussion of fuel efficiency, SUVs and trucks are the industry’s biggest sellers right now as a remarkable number of buyers seem to be compelled by three factors: great deals, low gasoline prices, and winter weather.” ❈ ❈ ❈ ❈

Metals

Alcoa announces cuts in smelter output, capital spending

Citing plunging demand for aluminium, Alcoa Inc on 7 th January announced it would cut output and eliminate 13,500 jobs. And capital spending by the largest US aluminium producer

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EuroWire – March 2009 Euro ire – January 2 06