TPT January 2009

From the AmericaS

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.”

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January 2009

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