US automakers suffer from sour sales
The two major US car producers, General Motors (GM) and Ford, announced that dramatic decreases in their sales continued through February. Ford experienced a 3% decrease in overall sales, including a 15% decrease in some models, while GM indicated that sales had fallen off 12.7%, with the decline reaching 30% for some models.
Auto-parts manufacturers for GM and Ford are also being affected by the decline. For example Michigan-based auto interiors supplier Lear Corp. lowered its earnings forecast for the first quarter upon learning of the
production cuts. Several auto-parts makers, such as Lear, American Axle, Magna International Inc. and Superior Industries International Inc., worry that they may face bankruptcy if the decline continues.
Furthermore, the decline in sales has also caused some companies to lay off workers. GM announced Tuesday that it was closing its Lansing Car Assembly plant, temporarily laying off 3'200 workers. Auto-parts manufacturers also warn that they may cut jobs.
On the other hand, the Asian automakers' share of the pie has increased, with Toyota, Nissan and Hyundai all adding to their US presence.
The overall
US market share of Asian automakers increased 4% points to 36.1%, while domestic automakers lost 5% points, going down to 57.9%.
The US
automotive industry partly blames steel makers for their decrease in sales. Ford Motor Co., the second-largest U.S. automaker, and Delphi Corp., the world's largest auto-parts company, asked the U.S. International Trade Commission to lift duties on steel imports from
Brazil,
Japan and
Russia.
However,
US Steel and
Nucor Corp., the two largest American steel producers, staunchly defend the tariffs. They claim that removing the tariffs would lead to an influx of cheap imports that the domestic steel industry could not compete with.