General Motors and Ford Announce Production Cutbacks
Resource from: www.ebearng.com Likes:2961
Sep 14,2004
General Motors Corporation (USA) and Ford Motor Company (USA) have announced they will cut U.S. vehicle production by at least 165,000 units in the coming months.
The announcement comes at a bad time for bearing manufacturers, most of whose sales are tied in some way, directly or indirectly, to the U.S. auto industry, its suppliers or industrial equipment used in those plants.
Industrial bearing sales had only recently begun to show signs of continued strength which might continue through 2004, but an offsetting loss of automotive-related sales could stall that progress.
A variety of factors, ranging from higher oil prices to Hurricane Charley, were blamed. Sales fell 13% in August for Ford, while General Motors light vehicle sales fell 14%.
The sales problem is all the more difficult to analyze because it came in the face of heavy discounting by both companies, in addition to rebates and low-cost financing offers.
Ford said it will now build approximately 830,000 vehicles in North America during third quarter 204, down almost 8% from 900,000 in third quarter 2003.
General Motors said its analysts believe the overall market for new vehicles fell by more than 5% in August. Through August, GM's U.S. market share stood at 27.5%.
On those results, GM announced it will build 1,290,000 vehicles in third quarter 2004, down almost 7% from 1,385,000 in third quarter 2003. GM's second quarter 2004 production had been down 5% from 2003's.
It is not yet clear if the cuts and new car market softening are as fundamental as GM analysts have projected. Toyota, Honda, and others have not yet released their production planning for the remainder of the year. And some of the biggest losers have been GM's and Ford's cash cows -- trucks and SUVs. Sales of GMC Suburban SUVs fell 38% in August, for example.
Light trucks, which usually can be counted on to remain strong or at least steady at times of light automobile demand, were also down. GM, for example, had 85 days inventory on hand at the end of August, up from 76 days at the end of July.
DaimlerChrysler, for its part, said Chrysler Corporation's U.S. sales in August were essentially flat from 2003, while Mercedes-Benz brand sales were up slightly.
Separately, GM Chairman and CEO, Rick Waggoner, said the company may unilaterally impose additional cost cuts on its suppliers if sales do not improve. He said that if GM is not able to improve sales, it will have to find other ways to meet the self-imposed $7.00 per share earnings target that Wall Street is expecting.
While suppliers may find it disingenuous for GM to penalize them for an overly-aggressive earnings promise made to Wall Street, their dependence on those sales puts few in any position to complain publicly.
Mr. Waggoner said, "I hope that sales do pick up over the next few months and run well, and with robust production, I hope we can exceed the forecast. But we've got to, at least at this point, plan for tightening up."
(www.ebearng.com)
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1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
2.All news edited and translated by us are specially noted the source"CBCC".
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