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Crunch watch Jan 09: the auto industry in crisis

Fri, 30 Jan 2009

By Tim Pollard, Ben Pulman and Gareth Evans

Motor Industry

30 January 2009 12:39

Friday 30 January 2009
• Honda is about to close the Swindon factory for four months when Friday's shifts are finished; the shutdown will affect 2500 of the 3700 staff, who will receive full pay for two months and then 60% pay for the next eight weeks (BBC News)
• Porsche has announced a sharp drop in sales and likely profits. It forecasts a 27% drop in 911, Boxster, Cayman and Cayenne sales to around 34,000 units in the six months to the end of January 2009 (Financial Times, subscription required)
• Ford wants Washington to do more to stimulate car sales, after posting a record loss of nearly $14.6 billion earlier this week (Detroit News)
• Honda's quarterly profit has crashed by 90% – forcing the Japanese car maker to halve its annual profit target (Detroit Free Press)

Thursday 29 January 2009
• Ford of Europe is a bright spot in the Blue Oval's quarterly results today, making $1.06 billion pre-tax profit in 2008 (up from $997m in 2007). It's the first profit of more than $1bn since 1989 (Automotive News Europe, subscription required)
• Volvo suffered a 'disastrous 2008' with a pre-tax loss of $1.46bn. In 2007, Volvo made a loss of $164m. Owner Ford, which is looking to sell Volvo, blamed a collapse in sales from 482,000 cars in 2007 to just 359,000 last year
• Ford reports a net loss of $5.9 billion in the fourth quarter of 2008, compared with $2.8bn last year. Its cash reserves stand at $13.4bn – and it needs at least $10bn to run its operations, say analysts. As it's burning through $1.83bn a month, some fear the Blue Oval could be in trouble by the end of February (Ford Motor Company)
• Ford is poised to announce on Thursday a big fourth-quarter loss for 2008. All eyes are on the Blue Oval's cash-burn rate and prospects for 2009 – as yet it is the only one of the Big Three not to require state assistance (Automotive News, subscription required)
• The Spanish authorities have cancelled the May 2009 Barcelona motor show after a string of manufacturers pulled out. GM, Peugeot, Citroen and Nissan refused to sign up amid cost cutting and weak Spanish car sales (Automotive News Europe, subscription required)
• VW chief exec Martin Winterkorn warns that the crisis in the car market is deepening. He estimates that global sales have slumped by a quarter in January 2009 (Financial Times)
• Ford's US credit arm, Ford Motor Credit, is making a fifth of its staff – 1200 people – redundant. Spokeswoman Margaret Mellott points out the company no longer finances Jaguars or Land Rovers, while Ford sales have also slowed down (Automotive News, subscription required)
• Oil giant Shell posts a sharp fall in profits... to 'just' £3.4 billion in the final quarter of 2008. Oh how we feel for them! (BBC News)
• Chrysler LLC is demanding a fresh round of supplier price cuts as it prepares for its 17 February deadline to justify the federal aid package (Automotive News, subscription required)

Wednesday 28 January 2009
• Aston Martin has put all its production line staff on a three-day week (BBC)
• GKN, which supplies car parts for Ford, Land Rover and other manufacturers, has confirmed it has cut 2800 jobs worldwide since October (242 in the UK) and may have to shed more in 2009 (BBC)
• Mitsubishi's global production volume in 2008 was down 7.8% compared to 2007, at 1,301,373 units (Mitsubishi Motors)
• Lord Mandelson has been criticised for not making the UK government's more extensive, as Vauxhall and JLR will swallow most of the £2.5bn lifeline (Financial Times)     
• Nissan's global production volume in 2008 was down 1.1% compared to 2007, at 3,394,830 units (Newspress, subscription required)
• Lotus chief exec Mike Kimberley has welcomed the UK government's aid: 'It has been a long time coming but I welcome the announcement. I am delighted that the UK Government has recognised the vital importance to the automotive industry of research into green, environmental and low carbon vehicle solutions.' (Newspress, subscription required)
• The Society of Motor Manufacturers and Traders has welcomed the Government's aid but questioned the usefulness for the consumer. SMMT chief executive Paul Everitt said: 'As an industry, we emphasised the lack of specific proposals to stimulate demand in the market and ease consumer credit' (SMMT)

By Tim Pollard, Ben Pulman and Gareth Evans