World Economic Crisis Impact on Auto Sector **Saab's Problems (page 6)**
11-18-2008, 01:36 PM
#82
The sizzle in the Steak
Thread Starter
Question is will they admit it publicly? NO WAY!
They have to keep serving the kool-aid to the Union members and to gov't politicians that are on the Union "payroll". They sell their members and try to sell the general public the lies.
In the end the Union is in business for only one thing: The Union.
They will sell the company and their members down the river to save themselves.
The Union will cut off it's nose to spite its face.
The Union will bite the hand that feeds.
11-28-2008, 01:52 AM
#83
Instructor
Join Date: Nov 2008
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BMW: CEO says “biggest crisis in its history;” rivals have similar concerns
http://www.leftlanenews.com/ceo-says...-concerns.html
BMW, which has seen it sales double since 1999, is now in the “biggest crisis in its history,” CEO Norbert Reithofer told Germany’s Spiegel. Like all automakers, BMW’s sales have been hit hard by the financial crisis, but the company’s reliance on leasing for a large percentage puts it in an even more vulnerable position.
Reithofer isn’t alone in his sentiment. Daimler boss Dieter Zetsche admitted the situation could easily be the “worst crisis since World War II.” If that’s the case, expect more job cuts and production slowdowns at Mercedes and BMW.
Even Volkswagen, which has a much broader brand and model mix, is concerned about its future. “We have never before seen this kind of a crisis,” chairman Martin Winterkorn said. He said it would be impossible for his company to avoid “difficult cuts” and “painful” measures.
According to the New York Times, luxury cars from BMW and Mercedes are beginning to pile up at U.S. ports. But they aren’t the only ones. Literally thousands of Toyota and Nissan models have filled acres of land at the port in Long Beach, California. In fact, Mercedes, Toyota and Nissan have requested to lease additional space at a 160-acre lot to park their slow-selling cars.
Recently, Toyota Executive Vice President Mitsuo Kinoshita characterized the current situation as “an emergency, of a magnitude we have never seen before.”
So is any automaker immune to the economic collapse in America, Europe, and Asia? Simply put: no. After all, Mercedes, BMW, VW, and Toyota are usually thought of as the most stable automakers in the world. Their survival will depend entirely on their ability to quickly adapt to slowing sales. Without the same rigid union and legacy costs of the Detroit Three, we’re hopeful they’ll all pull through.
Reithofer isn’t alone in his sentiment. Daimler boss Dieter Zetsche admitted the situation could easily be the “worst crisis since World War II.” If that’s the case, expect more job cuts and production slowdowns at Mercedes and BMW.
Even Volkswagen, which has a much broader brand and model mix, is concerned about its future. “We have never before seen this kind of a crisis,” chairman Martin Winterkorn said. He said it would be impossible for his company to avoid “difficult cuts” and “painful” measures.
According to the New York Times, luxury cars from BMW and Mercedes are beginning to pile up at U.S. ports. But they aren’t the only ones. Literally thousands of Toyota and Nissan models have filled acres of land at the port in Long Beach, California. In fact, Mercedes, Toyota and Nissan have requested to lease additional space at a 160-acre lot to park their slow-selling cars.
Recently, Toyota Executive Vice President Mitsuo Kinoshita characterized the current situation as “an emergency, of a magnitude we have never seen before.”
So is any automaker immune to the economic collapse in America, Europe, and Asia? Simply put: no. After all, Mercedes, BMW, VW, and Toyota are usually thought of as the most stable automakers in the world. Their survival will depend entirely on their ability to quickly adapt to slowing sales. Without the same rigid union and legacy costs of the Detroit Three, we’re hopeful they’ll all pull through.
11-28-2008, 03:31 AM
#84
Race Director
It's a crisis in that the decline is from unsustainbly high sales - just like the housing market. In a normal times you don't double the value of a house nor do you double your sales in just a few years. The same thing was said during the tech bubble 8 years ago. The sky will not be falling but sales will be down to more "normal" levels - that means to people who can actually afford them.
11-28-2008, 08:57 AM
#86
99 TL, 06 E350
People who think we are close to getting out of this mess should stop listening to the media. We are far far far from even beginning to fix this mess.
11-28-2008, 09:35 AM
#87
the big three should merge into one, and take the loss. The sooner we accept the dilemma, the sooner the worst can arrive and we can start to recover. Makes no sense to delay the worst case scenario. Bring it on earlier so we can get it over with.
11-28-2008, 11:55 AM
#89
Punk Rocker
It's a crisis in that the decline is from unsustainbly high sales - just like the housing market. In a normal times you don't double the value of a house nor do you double your sales in just a few years. The same thing was said during the tech bubble 8 years ago. The sky will not be falling but sales will be down to more "normal" levels - that means to people who can actually afford them.
11-28-2008, 05:09 PM
#90
I drive a Subata.
iTrader: (1)
11-29-2008, 01:13 AM
#91
2G TLX-S
It's a crisis in that the decline is from unsustainbly high sales - just like the housing market. In a normal times you don't double the value of a house nor do you double your sales in just a few years. The same thing was said during the tech bubble 8 years ago. The sky will not be falling but sales will be down to more "normal" levels - that means to people who can actually afford them.
11-29-2008, 02:51 AM
#92
Senior Moderator
Merged...I believe we'll have more news related to this in the next while. 
12-01-2008, 11:57 AM
#93
99 TL, 06 E350
Aston Martin laying off 600 employees
http://business.theglobeandmail.com/.../Business/home
Associated Press
December 1, 2008 at 12:29 PM EST
LONDON — Aston Martin, maker of James Bond's luxury sports car, said Monday that it is laying off as much as a third of its work force because of falling sales during the economic slump.
The cuts involve a mix of full-time and temporary jobs at its plant in Gaydon in western England.
“It is hoped to do this by minimizing the impact on employees as far as possible, but the possibility of up to 300 permanent and a similar number of temporary job losses cannot be ruled out,” the company said in a statement. It now employs 1,700 people in Britain.
Aston Martin sold 110 cars in Britain in October compared with 164 in the same month last year. Total annual sales are expected to drop to 6,500 this year compared with 7,300 this year.
The company's sticker price for its cheapest Vantage model is Ł83,000 ($128,000 U.S.) and prices run as high as Ł162,500 ($250,000) for the DBS, the car featured in the latest James Bond film, A Quantum of Solace.
“Like other premium car brands, Aston Martin has been forced to take action to respond to the unprecedented downturn in the global economy. These are regrettable but necessary measures in the extraordinary market conditions we all now face,” said chief executive officer Ulrich Bez.
“Over all, we remain confident that the Aston Martin brand is the strongest it has ever been: with dedicated design, engineering and manufacturing facilities and an award-winning product range, we remain well positioned for the upturn in the economy.”
The Unite union said it would oppose compulsory layoffs but would work with the company to achieve voluntary departures.
“In the current climate, this is not surprising but we are extremely disappointed” said Dave Osborne, a national officer for the union.
December 1, 2008 at 12:29 PM EST
LONDON — Aston Martin, maker of James Bond's luxury sports car, said Monday that it is laying off as much as a third of its work force because of falling sales during the economic slump.
The cuts involve a mix of full-time and temporary jobs at its plant in Gaydon in western England.
“It is hoped to do this by minimizing the impact on employees as far as possible, but the possibility of up to 300 permanent and a similar number of temporary job losses cannot be ruled out,” the company said in a statement. It now employs 1,700 people in Britain.
Aston Martin sold 110 cars in Britain in October compared with 164 in the same month last year. Total annual sales are expected to drop to 6,500 this year compared with 7,300 this year.
The company's sticker price for its cheapest Vantage model is Ł83,000 ($128,000 U.S.) and prices run as high as Ł162,500 ($250,000) for the DBS, the car featured in the latest James Bond film, A Quantum of Solace.
“Like other premium car brands, Aston Martin has been forced to take action to respond to the unprecedented downturn in the global economy. These are regrettable but necessary measures in the extraordinary market conditions we all now face,” said chief executive officer Ulrich Bez.
“Over all, we remain confident that the Aston Martin brand is the strongest it has ever been: with dedicated design, engineering and manufacturing facilities and an award-winning product range, we remain well positioned for the upturn in the economy.”
The Unite union said it would oppose compulsory layoffs but would work with the company to achieve voluntary departures.
“In the current climate, this is not surprising but we are extremely disappointed” said Dave Osborne, a national officer for the union.
12-01-2008, 12:06 PM
#94
Senior Moderator
The world is coming to an end.
I am convinced.
12-01-2008, 01:07 PM
#98
The sizzle in the Steak
Thread Starter
12-01-2008, 02:49 PM
#99
Pro
German Auto Industry Facing the Abyss - Business Week Article
Long and interesting read from Business Week. I have to say that it's just interesting that how bad times, even if just there for a few months, can crush the good times that have lasted for years.
____________________________________________
http://www.businessweek.com/print/gl...125_139397.htm
German Auto Industry Facing the Abyss
Carmakers in Germany are facing their worst crisis in decades, with hundreds of thousands of jobs at risk. BMW and Mercedes are especially vulnerable
By Dietmar Hawranek
It was time for Martin Winterkorn to relax. The exhausted chairman of the VW Group was sitting in a leather seat on the company jet, coming from a conference in Berlin where he warned attendees of the consequences of the financial crisis. It had been a long day. It was 9 p.m. and he was still in the air.
"We have never before seen this kind of a crisis," Winterkorn, 61, said at the conference. The German auto industry, he told his audience, must prepare itself for a "tough, prolonged dry spell." It would not be possible to avoid "difficult cuts" and "painful" measures, Winterkorn said.
Even after the conference, sitting in the company jet, the head of VW was still preoccupied with the question: "How bad is it really?" Winterkorn has been in the industry for decades, and he has weathered many a crisis. But now he too is baffled. "I don't know what else is going to happen," he said.
According to Dieter Zetsche, the CEO of Daimler, there are those in the industry who believe that "up to 100,000 jobs will be lost in the German auto industry in the next 10 years." Some, says Zetsche, are even suggesting that this is "the worst crisis since World War II."
The Daimler CEO has already concluded that Mercedes-Benz will produce more than 150,000 fewer cars than planned in 2009. Management is negotiating with labor representatives over the possibility of Mercedes reducing the workweek to 30 hours, with a corresponding wage cut for workers, or introducing part-time work at the company. Daimler may have to cut several thousand jobs. How many? Zetsche, 55, is not even willing to venture a guess.
Sharp Decline in Sales
Norbert Reithofer, the 52-year-old chief executive of BMW, is similarly baffled. He believes the company is "in the biggest crisis in its history." BMW has already cut more than 8,000 jobs this year. Production in its plants is shut down for several weeks at a time, a step that Volkswagen and Mercedes-Benz have also taken. But this will not be enough to offset the sharp decline in sales. In some markets, auto sales have not dropped by this much since the 1973 oil crisis.
In October, car sales dropped by 32 percent in the United States and close to 15 percent in Europe. Sales are also down in former growth markets India and Brazil, while economic growth in China is weakening.
This crisis is different from the ones before it. Opel is fighting for its survival, because its parent company, General Motors, is on the brink of bankruptcy. Mismanagement at Ford and Chrysler has driven the two companies into similarly dire straits. This was predictable.
But now even VW, Mercedes-Benz and BMW are at risk, companies that were considered the most stable in their industry. Even executives at Japanese carmaker Toyota are worried. According to Executive Vice President Mitsuo Kinoshita, "the current situation is an emergency, of a magnitude we have never seen before."
There is reason for this massive, general uncertainty: The auto industry is being assaulted on several fronts.
Sales are declining rapidly worldwide. If there is one thing anxious consumers can postpone, it is the purchase of a car. Economic crises normally affect one major market, which allows large car companies to make up for the difference in other countries. But this time the financial crisis is shaking North America, Asia and Europe at the same time.
Suppliers are likewise threatened. Banks have cut off funding for necessary investments. Some suppliers are already on the verge of bankruptcy. If the biggest manufacturer of rear-view mirrors or door locks fails, carmakers will be forced to stop production, and it will be difficult to quickly find replacements.
Tens of Thousands of Jobs at Risk
Providing consumers with financing is also becoming more difficult. Part of the reason VW, Audi, Mercedes-Benz, BMW and Porsche have enjoyed such phenomenal sales growth in recent years is that they have offered customers attractive leasing and financing packages. Now the carmakers' lending divisions must pay high interest rates to obtain the necessary funds on the capital markets, if they can borrow at all. As a result, they can no longer attract customers with low-interest car loans.
Ultimately, the entire business model of VW, Mercedes-Benz and BMW is beginning to falter. It is based on the assumption that carmakers can constantly increase sales by constantly introducing new models. This is the only way they can guarantee jobs. For car companies, standing still is in effect moving backwards. Companies that are not increasing sales are in fact shrinking, because productivity in their plants grows by 5 to 10 percent every year. Declining sales can potentially lead to the loss of tens of thousands of jobs.
Opel is not the only German carmaker seeking government assistance. VW, Daimler and BMW have also submitted their requests. They want Berlin to issue government loan guarantees on the loans taken out by the carmakers' financing divisions. They are also asking the German government to pay a premium to anyone who replaces a car more than 10 years old with a new one. And they want to see Brussels cancel its plans to impose penalties on manufacturers for failing to meet their CO2 emissions targets.
Still, its difficult not to think that some manufacturers are merely trying to divert attention away from their own mistakes. Many of the problems are homegrown. The companies placed too much emphasis on growth at all costs, while at the same time neglecting to develop fuel-efficient cars earlier in the game.
Nevertheless, the appeals for help show how serious the situation is. Some senior executives already question whether Daimler and BMW will survive the crisis as independent companies. And close examination reveals that both companies significant Achilles heels.
The biggest risk for BMW stems from its successes in recent years. The Munich-based company risked almost everything for its goal of finally overtaking rival Mercedes-Benz. BMW has almost doubled its car sales since 1999, and since 2007 the Bavarian carmaker has been the world's top seller in the premium class.
BMW has achieved this mainly by expanding its model line downward, with the 1 Series and the Mini. This weakened the company's profitability. But BMW has also boosted its sales by offering customers attractive leases and car loans; today this approach is used to sell every second car the company moves off its lots. This has increased risk.
While Daimler has only about €11 billion ($13.8 billion) on its books for leased vehicles, it is almost €20 billion ($25 billion) at BMW. That is BMW's major weakness.
BMW based its leasing calculations on an estimated residual value for the cars when customers return them after three or four years. But this value has little to do with reality these days, because used car prices fall during an economic crisis. Besides, more and more customers who purchased a BMW on credit can no longer afford their car payments. In the first nine months of this year alone, BMW had to establish reserves of more than €1 billion ($1.25 billion) to make up for the difference, and more reserves are likely to follow.
The second risk for BMW lies in the fact that customers are increasingly buying smaller models, or at least are opting for smaller engines in the larger 5 Series and 7 Series. Because of this, Munich-base engine factories have slid into the danger zone this year.
Waste of Money
"We are producing the wrong engines," Manfred Schoch, the chairman of BMW's works council, warned. The plant can satisfy the demand for eight-cylinder engines in single-shift operation over a four-day workweek. Six-cylinder engines are also becoming less popular, so much so that production could be shifted to the company's engine plan in Steyr in the future. This would "mean the death of BMW at the Munich location," said Shoch.
By introducing new working hour models, Schoch managed to reduce wage costs so that more four-cylinder engines can be assembled in Munich in the future, thereby saving the plant. But BMW still has the problem of having to achieve adequate profits with smaller models in the future.
The company is poorly prepared for this. Building the 1 Series with rear-wheel drive and the Mini with front-wheel drive is a complete waste of money, because it means that the two cars need different engines and transmissions, eliminating the savings that could be achieved with identical parts.
BMW CEO Reithofer and Daimler CEO Zetsche have long agreed that the two companies must work together. Daimler has the same problem with its A and B Class models, which are produced in numbers that are far too small. What would be more obvious than joint development of the platform for the next generation of entry-level models?
Engineers from both companies have been searching for possible joint projects for more than a year now. But everything they have turned up has only served as proof of why cooperation is impossible. Each of the partners is convinced that his development is the best. The companies have agreed to joint purchasing of windshield wipers, batteries and other parts, but nothing more.
'I Want to See Results'
In a recent board meeting, Reithofer was visibly irritated by this relative lack of cooperation. He told the group that he was no longer interested in hearing why things were not working. "I want to see results," he said.
The mood in Munich is tense, as layoffs have led to discord between the board of directors and the works council. Manfred Schoch, who heads up the BMW works council, complains that employees were simply left with no work to do, so that they could be bullied into signing a termination agreement. Schoch asks: "How low have we sunk?"
Ironically, BMW has probably the most flexible working hour models in the industry. Employees can accumulate up to 300 hours of overtime in working hour accounts or work up to 300 less than normal—and consistently receive the same wages. Only after an extended period of time are they required to balance out the working hour accounts. The result is that BMW can shut down a factory for two months without adverse effects on employees. Only after two months do workers face the threat of short-time work and further layoffs.
According to one senior executive, BMW would already have slipped into the red without this year's savings measures. The Quandt family, which owns a little less than 50 percent of shares, knows that this would immediately fuel speculation over a sale of BMW. To dispel such speculation, the reclusive Stefan Quandt appeared with BMW CEO Reithofer at a ceremony to award the "Golding Steering Wheel" at offices of the tabloid Bild am Sonntag. The clear message was that the family is sticking to BMW—for now, at least.
Daimler CEO Zetsche would welcome a major shareholder like Quandt. Zetsche's company, too, has a large Achilles heel: Daimler's shareholder structure. Because it lacks a major shareholder, the company is constantly at risk of being bought up and dismantled.
For this reason, the Stuttgart-based carmaker has to be managed using the same criteria that led General Motors to the brink of ruin: It must earn high short-term returns and pay large dividends. This is the only way to bring up the share price and thus prevent a takeover. But, under these conditions, how can the company be expected to continue designing cars that lead the world in technology, design and quality? And how can Mercedes-Benz justify its high prices in the long term?
The developers of the next A and B Class vehicles are feeling the brunt of this dilemma. Their investments must pay off at a planned sales figure of 350,000 vehicles a year. Of course, Mercedes charges higher prices for its models than VW does for its Golf. But VW sells almost twice as many Golfs, as well as using the same platform to build Audi and Skoda models.
"The Wolfsburgers can outfit the Golf with better equipment than we can provide with the A Class," complains one Mercedes developer. For this reason, Daimler's attempt to develop everything in the compact class internally could damage its brand image.
Distress at Daimler
VW has two major shareholders, Porsche and the state of Lower Saxony. Although the two are locked in a power struggle, they agree on one thing: Both are more interested in long-term development than short-term profits. In Daimler's case, pressure coming from the capital market prompted the company to buy back €5 billion ($6.25 billion) of its own stock.
The carmaker could have invested the money in the development of more environmentally-friendly cars. But this would only produce long-term profits, while reducing profits in the short term. It should thus come as no surprise that BMW has a small lead in the development of fuel-efficient technologies (including a start-stop automatic transmission and recovery of braking energy).
There is also another reason the crisis is causing such distress at Daimler. Normally, luxury cars like the world-famous sedans with the Mercedes star on the hood are not as sharply affected by an economic slump as mass-market models. But this appears to be changing. "The affluent still have the necessary money," says Daimler CEO Zetsche, "but some feel that it is no longer appropriate to drive a big car"—because of the crisis, but also in deference to the climate protection debate.
The mood is gloomy in Mercedes-Benz dealerships. At some dealerships, there are days when not a single new car is sold. When a customer does buy a car, it is more than likely a slightly used car with just 5,000 kilometers (3,100 miles) on the odometer—but already available at a 40 percent markdown.
Because many dealers also sell Mercedes trucks and this business has come to a virtual standstill, they are fighting to survive. Daimler has already provided its dealerships in Germany with €53 million ($66 million) to make up for losses, and €10 million ($12.5 million) for demonstration models. Now the company-owned dealerships, which expect combined losses of about €200 million ($250 million) this year, expect financial assistance.
In this crisis, CEO Zetsche is coming under growing pressure to search for a large-scale solution, in addition to the usual cost-cutting programs, to broaden the company's base. A joint venture with BMW would be one possibility. The second option, say experts, would be close cooperation with a technology company that could help the carmaker develop new drive technology. Under this sort of arrangement, Daimler could also be protected against takeover attempts through a capital investment by the new partner.
VW also at Risk
Volkswagen has already undergone a more or less friendly takeover. The new major shareholder, Porsche, whose sales have declined sharply because of a model changeover, secured its own technology by launching the takeover. The small sports car manufacturer now has access to Europe's biggest automaker.
But even the VW Group faces a serious challenge. The board must correct its model strategy. Until now, developers at VW headquarters in the central German city of Wolfsburg were fixated on developing more and more powerful engines. In addition to a 16-cylinder engine, the company has two different 12-cylinder engines—which not even BMW or Mercedes-Benz can offer. But this does Volkswagen little good, because smaller, fuel-efficient engines are now in demand.
It must have taken will power for Winterkorn, powerful engine enthusiast that he is, to see his company building three-cylinder engines. But the VW CEO has recognized that the future of the company depends more heavily on whether it can become the leader in this model class than on new, high-performance engines.
Winterkorn must also question his growth strategy, which involves almost doubling VW sales by 2018. This would have meant job security for the group's 330,000 employees. But because there is likely to be no growth at all in the next two years, VW has the problem of having too many employees, and company executives assume that VW will have to eliminate several thousand jobs. This will most likely affect some of VW's 18,000 short-term employees and its 25,000 temporary workers.
The board's initial goal is to prevent too many cars from being produced, since they could only be sold at a deep discount. The Christmas break at VW's Wolfsburg plant, already extended to last from Dec. 19 to Jan. 4, will likely be expanded even further.
For German automakers, the year 2009 will begin with eerie silence. It will be quiet in almost all plants, in Stuttgart, Munich, Regensburg, Rüsselsheim, Kaiserslautern, Cologne, Emden, Hannover, Braunschweig and Wolfsburg. All assembly lines will be shut down.
"We are about to face a serious test," says Daimler CEO Zetsche, and yet this does not make him pessimistic about the future of the German auto industry, not by a long shot. It is still more competitive than many other auto industries, not just from the United States, but also from France and Italy.
The crisis "is also a time of renewal," says Zetsche. "We will now see how well-prepared for the future our industry is."
____________________________________________
http://www.businessweek.com/print/gl...125_139397.htm
German Auto Industry Facing the Abyss
Carmakers in Germany are facing their worst crisis in decades, with hundreds of thousands of jobs at risk. BMW and Mercedes are especially vulnerable
By Dietmar Hawranek
It was time for Martin Winterkorn to relax. The exhausted chairman of the VW Group was sitting in a leather seat on the company jet, coming from a conference in Berlin where he warned attendees of the consequences of the financial crisis. It had been a long day. It was 9 p.m. and he was still in the air.
"We have never before seen this kind of a crisis," Winterkorn, 61, said at the conference. The German auto industry, he told his audience, must prepare itself for a "tough, prolonged dry spell." It would not be possible to avoid "difficult cuts" and "painful" measures, Winterkorn said.
Even after the conference, sitting in the company jet, the head of VW was still preoccupied with the question: "How bad is it really?" Winterkorn has been in the industry for decades, and he has weathered many a crisis. But now he too is baffled. "I don't know what else is going to happen," he said.
According to Dieter Zetsche, the CEO of Daimler, there are those in the industry who believe that "up to 100,000 jobs will be lost in the German auto industry in the next 10 years." Some, says Zetsche, are even suggesting that this is "the worst crisis since World War II."
The Daimler CEO has already concluded that Mercedes-Benz will produce more than 150,000 fewer cars than planned in 2009. Management is negotiating with labor representatives over the possibility of Mercedes reducing the workweek to 30 hours, with a corresponding wage cut for workers, or introducing part-time work at the company. Daimler may have to cut several thousand jobs. How many? Zetsche, 55, is not even willing to venture a guess.
Sharp Decline in Sales
Norbert Reithofer, the 52-year-old chief executive of BMW, is similarly baffled. He believes the company is "in the biggest crisis in its history." BMW has already cut more than 8,000 jobs this year. Production in its plants is shut down for several weeks at a time, a step that Volkswagen and Mercedes-Benz have also taken. But this will not be enough to offset the sharp decline in sales. In some markets, auto sales have not dropped by this much since the 1973 oil crisis.
In October, car sales dropped by 32 percent in the United States and close to 15 percent in Europe. Sales are also down in former growth markets India and Brazil, while economic growth in China is weakening.
This crisis is different from the ones before it. Opel is fighting for its survival, because its parent company, General Motors, is on the brink of bankruptcy. Mismanagement at Ford and Chrysler has driven the two companies into similarly dire straits. This was predictable.
But now even VW, Mercedes-Benz and BMW are at risk, companies that were considered the most stable in their industry. Even executives at Japanese carmaker Toyota are worried. According to Executive Vice President Mitsuo Kinoshita, "the current situation is an emergency, of a magnitude we have never seen before."
There is reason for this massive, general uncertainty: The auto industry is being assaulted on several fronts.
Sales are declining rapidly worldwide. If there is one thing anxious consumers can postpone, it is the purchase of a car. Economic crises normally affect one major market, which allows large car companies to make up for the difference in other countries. But this time the financial crisis is shaking North America, Asia and Europe at the same time.
Suppliers are likewise threatened. Banks have cut off funding for necessary investments. Some suppliers are already on the verge of bankruptcy. If the biggest manufacturer of rear-view mirrors or door locks fails, carmakers will be forced to stop production, and it will be difficult to quickly find replacements.
Tens of Thousands of Jobs at Risk
Providing consumers with financing is also becoming more difficult. Part of the reason VW, Audi, Mercedes-Benz, BMW and Porsche have enjoyed such phenomenal sales growth in recent years is that they have offered customers attractive leasing and financing packages. Now the carmakers' lending divisions must pay high interest rates to obtain the necessary funds on the capital markets, if they can borrow at all. As a result, they can no longer attract customers with low-interest car loans.
Ultimately, the entire business model of VW, Mercedes-Benz and BMW is beginning to falter. It is based on the assumption that carmakers can constantly increase sales by constantly introducing new models. This is the only way they can guarantee jobs. For car companies, standing still is in effect moving backwards. Companies that are not increasing sales are in fact shrinking, because productivity in their plants grows by 5 to 10 percent every year. Declining sales can potentially lead to the loss of tens of thousands of jobs.
Opel is not the only German carmaker seeking government assistance. VW, Daimler and BMW have also submitted their requests. They want Berlin to issue government loan guarantees on the loans taken out by the carmakers' financing divisions. They are also asking the German government to pay a premium to anyone who replaces a car more than 10 years old with a new one. And they want to see Brussels cancel its plans to impose penalties on manufacturers for failing to meet their CO2 emissions targets.
Still, its difficult not to think that some manufacturers are merely trying to divert attention away from their own mistakes. Many of the problems are homegrown. The companies placed too much emphasis on growth at all costs, while at the same time neglecting to develop fuel-efficient cars earlier in the game.
Nevertheless, the appeals for help show how serious the situation is. Some senior executives already question whether Daimler and BMW will survive the crisis as independent companies. And close examination reveals that both companies significant Achilles heels.
The biggest risk for BMW stems from its successes in recent years. The Munich-based company risked almost everything for its goal of finally overtaking rival Mercedes-Benz. BMW has almost doubled its car sales since 1999, and since 2007 the Bavarian carmaker has been the world's top seller in the premium class.
BMW has achieved this mainly by expanding its model line downward, with the 1 Series and the Mini. This weakened the company's profitability. But BMW has also boosted its sales by offering customers attractive leases and car loans; today this approach is used to sell every second car the company moves off its lots. This has increased risk.
While Daimler has only about €11 billion ($13.8 billion) on its books for leased vehicles, it is almost €20 billion ($25 billion) at BMW. That is BMW's major weakness.
BMW based its leasing calculations on an estimated residual value for the cars when customers return them after three or four years. But this value has little to do with reality these days, because used car prices fall during an economic crisis. Besides, more and more customers who purchased a BMW on credit can no longer afford their car payments. In the first nine months of this year alone, BMW had to establish reserves of more than €1 billion ($1.25 billion) to make up for the difference, and more reserves are likely to follow.
The second risk for BMW lies in the fact that customers are increasingly buying smaller models, or at least are opting for smaller engines in the larger 5 Series and 7 Series. Because of this, Munich-base engine factories have slid into the danger zone this year.
Waste of Money
"We are producing the wrong engines," Manfred Schoch, the chairman of BMW's works council, warned. The plant can satisfy the demand for eight-cylinder engines in single-shift operation over a four-day workweek. Six-cylinder engines are also becoming less popular, so much so that production could be shifted to the company's engine plan in Steyr in the future. This would "mean the death of BMW at the Munich location," said Shoch.
By introducing new working hour models, Schoch managed to reduce wage costs so that more four-cylinder engines can be assembled in Munich in the future, thereby saving the plant. But BMW still has the problem of having to achieve adequate profits with smaller models in the future.
The company is poorly prepared for this. Building the 1 Series with rear-wheel drive and the Mini with front-wheel drive is a complete waste of money, because it means that the two cars need different engines and transmissions, eliminating the savings that could be achieved with identical parts.
BMW CEO Reithofer and Daimler CEO Zetsche have long agreed that the two companies must work together. Daimler has the same problem with its A and B Class models, which are produced in numbers that are far too small. What would be more obvious than joint development of the platform for the next generation of entry-level models?
Engineers from both companies have been searching for possible joint projects for more than a year now. But everything they have turned up has only served as proof of why cooperation is impossible. Each of the partners is convinced that his development is the best. The companies have agreed to joint purchasing of windshield wipers, batteries and other parts, but nothing more.
'I Want to See Results'
In a recent board meeting, Reithofer was visibly irritated by this relative lack of cooperation. He told the group that he was no longer interested in hearing why things were not working. "I want to see results," he said.
The mood in Munich is tense, as layoffs have led to discord between the board of directors and the works council. Manfred Schoch, who heads up the BMW works council, complains that employees were simply left with no work to do, so that they could be bullied into signing a termination agreement. Schoch asks: "How low have we sunk?"
Ironically, BMW has probably the most flexible working hour models in the industry. Employees can accumulate up to 300 hours of overtime in working hour accounts or work up to 300 less than normal—and consistently receive the same wages. Only after an extended period of time are they required to balance out the working hour accounts. The result is that BMW can shut down a factory for two months without adverse effects on employees. Only after two months do workers face the threat of short-time work and further layoffs.
According to one senior executive, BMW would already have slipped into the red without this year's savings measures. The Quandt family, which owns a little less than 50 percent of shares, knows that this would immediately fuel speculation over a sale of BMW. To dispel such speculation, the reclusive Stefan Quandt appeared with BMW CEO Reithofer at a ceremony to award the "Golding Steering Wheel" at offices of the tabloid Bild am Sonntag. The clear message was that the family is sticking to BMW—for now, at least.
Daimler CEO Zetsche would welcome a major shareholder like Quandt. Zetsche's company, too, has a large Achilles heel: Daimler's shareholder structure. Because it lacks a major shareholder, the company is constantly at risk of being bought up and dismantled.
For this reason, the Stuttgart-based carmaker has to be managed using the same criteria that led General Motors to the brink of ruin: It must earn high short-term returns and pay large dividends. This is the only way to bring up the share price and thus prevent a takeover. But, under these conditions, how can the company be expected to continue designing cars that lead the world in technology, design and quality? And how can Mercedes-Benz justify its high prices in the long term?
The developers of the next A and B Class vehicles are feeling the brunt of this dilemma. Their investments must pay off at a planned sales figure of 350,000 vehicles a year. Of course, Mercedes charges higher prices for its models than VW does for its Golf. But VW sells almost twice as many Golfs, as well as using the same platform to build Audi and Skoda models.
"The Wolfsburgers can outfit the Golf with better equipment than we can provide with the A Class," complains one Mercedes developer. For this reason, Daimler's attempt to develop everything in the compact class internally could damage its brand image.
Distress at Daimler
VW has two major shareholders, Porsche and the state of Lower Saxony. Although the two are locked in a power struggle, they agree on one thing: Both are more interested in long-term development than short-term profits. In Daimler's case, pressure coming from the capital market prompted the company to buy back €5 billion ($6.25 billion) of its own stock.
The carmaker could have invested the money in the development of more environmentally-friendly cars. But this would only produce long-term profits, while reducing profits in the short term. It should thus come as no surprise that BMW has a small lead in the development of fuel-efficient technologies (including a start-stop automatic transmission and recovery of braking energy).
There is also another reason the crisis is causing such distress at Daimler. Normally, luxury cars like the world-famous sedans with the Mercedes star on the hood are not as sharply affected by an economic slump as mass-market models. But this appears to be changing. "The affluent still have the necessary money," says Daimler CEO Zetsche, "but some feel that it is no longer appropriate to drive a big car"—because of the crisis, but also in deference to the climate protection debate.
The mood is gloomy in Mercedes-Benz dealerships. At some dealerships, there are days when not a single new car is sold. When a customer does buy a car, it is more than likely a slightly used car with just 5,000 kilometers (3,100 miles) on the odometer—but already available at a 40 percent markdown.
Because many dealers also sell Mercedes trucks and this business has come to a virtual standstill, they are fighting to survive. Daimler has already provided its dealerships in Germany with €53 million ($66 million) to make up for losses, and €10 million ($12.5 million) for demonstration models. Now the company-owned dealerships, which expect combined losses of about €200 million ($250 million) this year, expect financial assistance.
In this crisis, CEO Zetsche is coming under growing pressure to search for a large-scale solution, in addition to the usual cost-cutting programs, to broaden the company's base. A joint venture with BMW would be one possibility. The second option, say experts, would be close cooperation with a technology company that could help the carmaker develop new drive technology. Under this sort of arrangement, Daimler could also be protected against takeover attempts through a capital investment by the new partner.
VW also at Risk
Volkswagen has already undergone a more or less friendly takeover. The new major shareholder, Porsche, whose sales have declined sharply because of a model changeover, secured its own technology by launching the takeover. The small sports car manufacturer now has access to Europe's biggest automaker.
But even the VW Group faces a serious challenge. The board must correct its model strategy. Until now, developers at VW headquarters in the central German city of Wolfsburg were fixated on developing more and more powerful engines. In addition to a 16-cylinder engine, the company has two different 12-cylinder engines—which not even BMW or Mercedes-Benz can offer. But this does Volkswagen little good, because smaller, fuel-efficient engines are now in demand.
It must have taken will power for Winterkorn, powerful engine enthusiast that he is, to see his company building three-cylinder engines. But the VW CEO has recognized that the future of the company depends more heavily on whether it can become the leader in this model class than on new, high-performance engines.
Winterkorn must also question his growth strategy, which involves almost doubling VW sales by 2018. This would have meant job security for the group's 330,000 employees. But because there is likely to be no growth at all in the next two years, VW has the problem of having too many employees, and company executives assume that VW will have to eliminate several thousand jobs. This will most likely affect some of VW's 18,000 short-term employees and its 25,000 temporary workers.
The board's initial goal is to prevent too many cars from being produced, since they could only be sold at a deep discount. The Christmas break at VW's Wolfsburg plant, already extended to last from Dec. 19 to Jan. 4, will likely be expanded even further.
For German automakers, the year 2009 will begin with eerie silence. It will be quiet in almost all plants, in Stuttgart, Munich, Regensburg, Rüsselsheim, Kaiserslautern, Cologne, Emden, Hannover, Braunschweig and Wolfsburg. All assembly lines will be shut down.
"We are about to face a serious test," says Daimler CEO Zetsche, and yet this does not make him pessimistic about the future of the German auto industry, not by a long shot. It is still more competitive than many other auto industries, not just from the United States, but also from France and Italy.
The crisis "is also a time of renewal," says Zetsche. "We will now see how well-prepared for the future our industry is."
12-01-2008, 03:35 PM
#100
wow who knew AM had 600 employees...
12-02-2008, 06:10 AM
#101
12-02-2008, 07:40 AM
#102
Race Director
"We are producing the wrong engines," Manfred Schoch, the chairman of BMW's works council, warned. The plant can satisfy the demand for eight-cylinder engines in single-shift operation over a four-day workweek. Six-cylinder engines are also becoming less popular, so much so that production could be shifted to the company's engine plan in Steyr in the future
12-08-2008, 09:42 AM
#103
Ferrari in crisi
Ferrari has denied falling victim to the global economic crisis, even though it plans to shed up to 10 per cent of its workforce this week.
Global sales at the Italian supercar maker have dived from almost 600 a month to just 92 cars in November and Ferrari is now negotiating with Italy’s trade unions to trim unwanted road-car production staff.
The company has admitted it could shed up to 300 employees as early as this Friday.
Ferrari will also shut its Maranello production plant for an unprecedented 20 days over Christmas, which sources insist will be to prevent vehicle stockpiles reaching unmanageable levels.
The company won its 16th F1 World Constructor’s Championship last month and still boasts of a two-year waiting list on its high-priced, exclusive road cars, but sources said that troubling stocks have built up at some of its distributors around the world, particularly in the UK.
As recently as the Paris motor show last October, Ferrari chairman Luca di Montezemolo had been speaking of a sales target of 10,000 cars for 2010 which, even with the new Ferrari California on stream early next year, now seems wildly optimistic.
Back then di Montezemolo insisted the financial crisis held no concerns for Ferrari because a reduction in sales would allow it to respond quickly to markets that might have otherwise waited years for cars.
“Of course the economic problems are being considered,” he said. “It depends how long this crisis goes on, if this is close to the end or not. Because we will see a different world out the other side."
The Ferrari chairman went on castigate the financiers whom he regards as responsible for the economic meltdown.
“It will be a world more close to industry and real numbers and products and not close to speculation," said di Montezemolo.
“I hope that when it finishes there will be more feet on the ground in the financial world,” he said.
Insiders have confirmed that sales of the V12-powered Ferrari 612 Scaglietti and Ferrari 599 Fiorano have effectively stalled and Ferrari has moved both models into a special customisation program to mask the seriousness of the problem.
Even worse, sales of its smaller, V8-powered Ferrari F430 – the core of the company's volume and profit, and due to be replaced late in 2009 – plummeted after the official unveiling of Ferrari’s new California in October.
Ferrari has denied that the company has been adversely affected by the credit crunch. The company said that the extended break was merely Ferrari being generous to its employees, even if all contracts were under review.
“We are going to have a meeting with the trade unions this week and we had a meeting with the union last week,” a Ferrari spokesman said.
“We don’t know if there is a figure decided, but we are certainly not taking people on board unless they are crucial.
“What’s being talked about [with the unions] is not renewing the people on one-year contracts, which would be about 300 people, and closely examining the consultancies and advisors and that kind of spending.
“We are just being careful. Nobody knows the future anymore and even having a waiting list like ours doesn’t guarantee anything for your future.”
Ferrari has said that the Christmas break (19 December to 7 January) is a coincidence of dates: “The two weekends have come at the right moment. If we needed to stop production we could have taken the entire week off instead of coming back on the Thursday.”
And, while sources insisted F430 stockpiles were growing and V12 production was at a virtual standstill, Ferrari’s spokesman insisted sales of luxury cars always slowed in the last months of the year.
“The only region where there are stocks is the UK,” he said.
“It’s the market where we have some problems. In the US, nothing much has changed for us apart from a slight braking of sales.”
“For sure, the F430 Spider is not doing very well, because of winter and the California, so there are stocks in some places.”
Global sales at the Italian supercar maker have dived from almost 600 a month to just 92 cars in November and Ferrari is now negotiating with Italy’s trade unions to trim unwanted road-car production staff.
The company has admitted it could shed up to 300 employees as early as this Friday.
Ferrari will also shut its Maranello production plant for an unprecedented 20 days over Christmas, which sources insist will be to prevent vehicle stockpiles reaching unmanageable levels.
The company won its 16th F1 World Constructor’s Championship last month and still boasts of a two-year waiting list on its high-priced, exclusive road cars, but sources said that troubling stocks have built up at some of its distributors around the world, particularly in the UK.
As recently as the Paris motor show last October, Ferrari chairman Luca di Montezemolo had been speaking of a sales target of 10,000 cars for 2010 which, even with the new Ferrari California on stream early next year, now seems wildly optimistic.
Back then di Montezemolo insisted the financial crisis held no concerns for Ferrari because a reduction in sales would allow it to respond quickly to markets that might have otherwise waited years for cars.
“Of course the economic problems are being considered,” he said. “It depends how long this crisis goes on, if this is close to the end or not. Because we will see a different world out the other side."
The Ferrari chairman went on castigate the financiers whom he regards as responsible for the economic meltdown.
“It will be a world more close to industry and real numbers and products and not close to speculation," said di Montezemolo.
“I hope that when it finishes there will be more feet on the ground in the financial world,” he said.
Insiders have confirmed that sales of the V12-powered Ferrari 612 Scaglietti and Ferrari 599 Fiorano have effectively stalled and Ferrari has moved both models into a special customisation program to mask the seriousness of the problem.
Even worse, sales of its smaller, V8-powered Ferrari F430 – the core of the company's volume and profit, and due to be replaced late in 2009 – plummeted after the official unveiling of Ferrari’s new California in October.
Ferrari has denied that the company has been adversely affected by the credit crunch. The company said that the extended break was merely Ferrari being generous to its employees, even if all contracts were under review.
“We are going to have a meeting with the trade unions this week and we had a meeting with the union last week,” a Ferrari spokesman said.
“We don’t know if there is a figure decided, but we are certainly not taking people on board unless they are crucial.
“What’s being talked about [with the unions] is not renewing the people on one-year contracts, which would be about 300 people, and closely examining the consultancies and advisors and that kind of spending.
“We are just being careful. Nobody knows the future anymore and even having a waiting list like ours doesn’t guarantee anything for your future.”
Ferrari has said that the Christmas break (19 December to 7 January) is a coincidence of dates: “The two weekends have come at the right moment. If we needed to stop production we could have taken the entire week off instead of coming back on the Thursday.”
And, while sources insisted F430 stockpiles were growing and V12 production was at a virtual standstill, Ferrari’s spokesman insisted sales of luxury cars always slowed in the last months of the year.
“The only region where there are stocks is the UK,” he said.
“It’s the market where we have some problems. In the US, nothing much has changed for us apart from a slight braking of sales.”
“For sure, the F430 Spider is not doing very well, because of winter and the California, so there are stocks in some places.”
12-08-2008, 10:59 AM
#104
The sizzle in the Steak
Thread Starter
In the end: Only 6 Automakers will be left in the world.
Only six automakers will survive the worldwide financial downturn, according to Fiat CEO Sergio Marchionne. “By the time we finish with this in the next 24 months, as far as mass-producers are concerned, we’re going to end up with one American house, one German of size; one French-Japanese; one in Japan; one in China and one potential European player,” Marchionne told Automotive News Europe.
He said he believes the only way for an automaker to survive is if it makes more than 5.5 million cars per year. That would mean even his company, Fiat, would have to merge with another in order to remain viable.
“This business is going to be completely different. It cannot continue as it did in the past. Independence in this business is no longer sustainable.”
Potentially unstable automakers include those that are private or family owned, said analyst Jürgen Pieper. BMW, for example, is 46.6 percent owned by the Quandt family. Similarly, 30 percent of PSA/Peugeot-Citroen, is owned by the Peugeot family. Pieper said if the downturn continues, those families will likely try to sell their stakes in the automakers to protect their fortunes.
Pieper said BMW and Fiat are among the most vulnerable European companies. BMW CEO Norbert Reithofer recently stated his company is in the “biggest crisis in its history,” so it would appear Marchionne and Pieper make a valid point.
Of course, no one really knows how much worse the downturn will get. But if the problems deepen, consolidation might be the only route to survival. This is already evident in America, where there is growing pressure for GM and Chrysler to merge.
On the other side of the argument, some analysts point to the failure of the Daimler-Chrysler merger as a deterrent to future consolidation. But if smaller automakers collapse as the result of the growing financial crisis, the net effect could be the same — fewer automakers, each with larger slices of the market.
He said he believes the only way for an automaker to survive is if it makes more than 5.5 million cars per year. That would mean even his company, Fiat, would have to merge with another in order to remain viable.
“This business is going to be completely different. It cannot continue as it did in the past. Independence in this business is no longer sustainable.”
Potentially unstable automakers include those that are private or family owned, said analyst Jürgen Pieper. BMW, for example, is 46.6 percent owned by the Quandt family. Similarly, 30 percent of PSA/Peugeot-Citroen, is owned by the Peugeot family. Pieper said if the downturn continues, those families will likely try to sell their stakes in the automakers to protect their fortunes.
Pieper said BMW and Fiat are among the most vulnerable European companies. BMW CEO Norbert Reithofer recently stated his company is in the “biggest crisis in its history,” so it would appear Marchionne and Pieper make a valid point.
Of course, no one really knows how much worse the downturn will get. But if the problems deepen, consolidation might be the only route to survival. This is already evident in America, where there is growing pressure for GM and Chrysler to merge.
On the other side of the argument, some analysts point to the failure of the Daimler-Chrysler merger as a deterrent to future consolidation. But if smaller automakers collapse as the result of the growing financial crisis, the net effect could be the same — fewer automakers, each with larger slices of the market.
Tick-tock on the VOLKSWAGEN MEGA GIANT GERMAN BRAND.
Tick-tock on the TOYOTA MEGA GIANT JAPANESE BRAND.
Tick-tock on the FORD MEGA GIANT USA BRAND.
12-08-2008, 12:19 PM
#105
Senior Moderator
http://www.leftlanenews.com/fiat-ceo...tml#more-12403
Tick-tock on the PORSCHE MEGA GIANT GERMAN BRAND.
Tick-tock on the TOYOTA MEGA GIANT JAPANESE BRAND.
Tick-tock on the FORD MEGA GIANT USA BRAND.
Tick-tock on the PORSCHE MEGA GIANT GERMAN BRAND.
Tick-tock on the TOYOTA MEGA GIANT JAPANESE BRAND.
Tick-tock on the FORD MEGA GIANT USA BRAND.
12-08-2008, 12:26 PM
#106
The sizzle in the Steak
Thread Starter
12-08-2008, 03:42 PM
#107
2G TLX-S
12-08-2008, 04:22 PM
#108
The sizzle in the Steak
Thread Starter
thread merge/renameIt's getting harder and harder to search for things around here.
Maybe the threads are merging like the auto industry
12-09-2008, 10:20 AM
#112
Senior Moderator
Not really, dude...there are 2 threads pertaining to the auto industry in trouble: this one (world automakers like Porsche, Lambo, etc.) and the other one currently stickied for North American automakers...
Not that hard.
12-09-2008, 10:21 AM
#113
Burning Brakes
Simple better search option... Google + site:acurazine.com <whatever you're looking for>
12-09-2008, 10:36 AM
#114
The sizzle in the Steak
Thread Starter
Leads to lots of reposts.
12-09-2008, 10:39 AM
#115
Senior Moderator
Yeah sorry about that...it shouldn't at this point as anything changed will be via merges...But, it was either merge all the stuff together or have 20 bazillion threads in Automotive News...
12-22-2008, 10:42 AM
#116
The sizzle in the Steak
Thread Starter
Korea’s Ssangyoung out of money, can’t pay employees
chrysler and general motors are hopefully that a recent government aid package will be enough to stave off bankruptcy, but things are looking much bleaker for korea’s ssangyoung motors. The small automaker announced late last week that it is no longer able to pay employees.
Ssangyoung has experienced an even bigger drop off in sales than most automakers, leaving ssangyoung’s piggy bank virtually empty. “the company is expected to post a deficit of more than w100 billion (about $76.7 million) this year alone,” the company said in a letter to employees. “due to lack of operating funds for december, it is impossible for the company to pay salaries any longer.”
ssangyoung has asked its parent company – china’s shanghai automotive industry — for emergency funds, but to no avail. Apparently shanghai automotive is upset that ssangyoung’s in-house union called for the firing of several chinese executives, prompting the automaker to turn down ssanyoung’s request, despite the company’s 51.3 percent stake in the korean automaker, according to chosun.
Ssangyoung has drastically reduced its operations over the past few months, including the shuttering of several plants. Ssangyoung’s dealership network has shrunk from 237 in early 2008 to just 180 now, resulting in a sales drop of 63 percent last year. In all, the jobs of 8,000 workers hang in the balance, with the future uncertain for ssangyoung.
Ssangyoung has experienced an even bigger drop off in sales than most automakers, leaving ssangyoung’s piggy bank virtually empty. “the company is expected to post a deficit of more than w100 billion (about $76.7 million) this year alone,” the company said in a letter to employees. “due to lack of operating funds for december, it is impossible for the company to pay salaries any longer.”
ssangyoung has asked its parent company – china’s shanghai automotive industry — for emergency funds, but to no avail. Apparently shanghai automotive is upset that ssangyoung’s in-house union called for the firing of several chinese executives, prompting the automaker to turn down ssanyoung’s request, despite the company’s 51.3 percent stake in the korean automaker, according to chosun.
Ssangyoung has drastically reduced its operations over the past few months, including the shuttering of several plants. Ssangyoung’s dealership network has shrunk from 237 in early 2008 to just 180 now, resulting in a sales drop of 63 percent last year. In all, the jobs of 8,000 workers hang in the balance, with the future uncertain for ssangyoung.
12-22-2008, 10:45 AM
#117
The sizzle in the Steak
Thread Starter
Toyota's forecasts loss as sales slide
NEW YORK (CNNMoney.com) -- Japanese auto giant Toyota said Monday that it would suffer an operating loss due to plummeting auto sales and a strong local currency.
About 30 minutes after the market closed in Tokyo, Toyota said it expected to lose approximately $1.5 billion to $1.7 billion this fiscal year. Toyota reports earnings on a fiscal calendar beginning in April.
This would be Toyota's first operating loss since 1950, Toyota spokesman Steve Curtis said.
Despite the likely operating loss, Toyota expects to post a $557 million net profit for the fiscal year.
Falling car sales in the United States and abroad have been taking a major toll on automakers.
Toyota will sell about 1.4 million fewer vehicles globally this fiscal year -- about 7.5 million vehicles in all -- than it did last year. The company's North American sales will be particularly hard-hit, dropping by 250,000 units, according to the automaker.
Toyota reports results based on a fiscal year calendar beginning in April.
Toyota (TM) said Monday that it expected worldwide auto sales in calendar year 2008 to decline 4%.
Japanese exports have suffered because of currency exchange rates. The rising value of the yen sent Japan's trade deficit shooting up to $2.5 billion in November, according to the Japanese government. Exports fell 27% on a month-over-month basis.
Toyota expects losses of about $2.2 billion due to currency exchange rates alone.
Toyota's main Japanese rival, Honda (HMC), reduced 2009 earnings estimates and cut its forecast for 2008 last week, saying there was "no prospect for recovery" as auto sales and the economy continue to deteriorate.
On Friday, the Bush administration said it would lend $13.4 billion to General Motors (GM, Fortune 500) and Chrysler to keep them out of bankruptcy.
About 30 minutes after the market closed in Tokyo, Toyota said it expected to lose approximately $1.5 billion to $1.7 billion this fiscal year. Toyota reports earnings on a fiscal calendar beginning in April.
This would be Toyota's first operating loss since 1950, Toyota spokesman Steve Curtis said.
Despite the likely operating loss, Toyota expects to post a $557 million net profit for the fiscal year.
Falling car sales in the United States and abroad have been taking a major toll on automakers.
Toyota will sell about 1.4 million fewer vehicles globally this fiscal year -- about 7.5 million vehicles in all -- than it did last year. The company's North American sales will be particularly hard-hit, dropping by 250,000 units, according to the automaker.
Toyota reports results based on a fiscal year calendar beginning in April.
Toyota (TM) said Monday that it expected worldwide auto sales in calendar year 2008 to decline 4%.
Japanese exports have suffered because of currency exchange rates. The rising value of the yen sent Japan's trade deficit shooting up to $2.5 billion in November, according to the Japanese government. Exports fell 27% on a month-over-month basis.
Toyota expects losses of about $2.2 billion due to currency exchange rates alone.
Toyota's main Japanese rival, Honda (HMC), reduced 2009 earnings estimates and cut its forecast for 2008 last week, saying there was "no prospect for recovery" as auto sales and the economy continue to deteriorate.
On Friday, the Bush administration said it would lend $13.4 billion to General Motors (GM, Fortune 500) and Chrysler to keep them out of bankruptcy.
12-22-2008, 10:56 AM
#118
99 TL, 06 E350
http://www.leftlanenews.com/fiat-ceo...tml#more-12403
Tick-tock on the VOLKSWAGEN MEGA GIANT GERMAN BRAND.
Tick-tock on the TOYOTA MEGA GIANT JAPANESE BRAND.
Tick-tock on the FORD MEGA GIANT USA BRAND.
Tick-tock on the VOLKSWAGEN MEGA GIANT GERMAN BRAND.
Tick-tock on the TOYOTA MEGA GIANT JAPANESE BRAND.
Tick-tock on the FORD MEGA GIANT USA BRAND.
12-22-2008, 01:58 PM
#120
The sizzle in the Steak
Thread Starter