GM Tries to Cut Up to 2,000 Workers
General Motors Corp.’s efforts to accelerate cuts to its salaried workforce helped the company’s stock rebound on Monday, a day when GM was one of the few automotive stocks to increase. GM is trying to cut up to 2,000 salaried positions in the first half of the year through early-retirement offers, said an official who is familiar with the situation. The move is an apparent acceleration of a plan already disclosed by the automaker.
The Steel Scene
Traditionally suffering from a poor image, the steel industry has become increasingly under the spotlight during the last 12 months as the strong demand for steel has led to short-term shortages in some industries, especially automotive. The steep increases in the cost of raw materials, including steel, is being cited as one of the principal reasons why carmakers may be forced to increase the price of their vehicles for the first time in years. Nissan, for example, which had to cease production at three of its plants in Japan for several days because of a steel shortage, has already said that it is considering a price rise and is watching with interest what its rivals are doing. Options it was said to be considering are reducing incentives, reducing the standard specification, or a simple price rise, the last being the least favorable due to the competitive nature of the retail market.
American Axle & Manufacturing Reports Fourth Quarter, Full Year 2004 Financial Results
American Axle & Manufacturing Holdings, Inc. (AAM) has reported its financial results for the fourth quarter and full year 2004. AAM reported fourth quarter diluted earnings of 61 cents per share compared to 96 cents per share in the fourth quarter of 2003. Earnings for the full year 2004 were $159.5 million as compared to $197.1 million in 2003. Full year 2004 diluted earnings per share were $2.98 as compared to $3.70 per share in 2003.
Timken Increases 2004 Earnings Estimate; Company to Announce 2004 Results February 1
Timken is increasing its 2004 earnings estimate, excluding special items, to $1.30 to $1.35 per diluted share, up from its previous estimate of $1.20 to $1.25. The company estimates fourth quarter earnings of 39 cents to 44 cents per diluted share, excluding special items, an increase of 10 cents from its prior estimate.
AAIA Urges Attendance at Three Strategic Industry Events
The Automotive Aftermarket Industry Association (AAIA) is urging aftermarket executives and managers to attend three very important events scheduled to take place in 2005. AAIA has rated the Aftermarket Legislative Summit, the Global Automotive Aftermarket Symposium (GAAS) and the Aftermarket eForum as ‘must-attend’ events for aftermarket executives and managers to stay in tune with the latest technology trends, management solutions and legislative initiatives.
S&P Lowers Credit Rating of Delphi
Delphi Corp., the world’s largest auto-parts supplier, had its credit rating reduced to below investment grade by Standard & Poor’s because of automaker production cuts and costs for steel and labor.
Delphi Plans More Job Cuts
Delphi Corp. said Friday it plans to cut 8,500 jobs, or 4.6 percent of its workforce, worldwide next year as part of an ongoing restructuring. The world’s largest automotive-parts supplier also expects to lose $350 million as it struggles with lower vehicle production and rising commodity prices. The Troy, Mich.-based company had a similar goal for global job reductions in 2004 and exceeded it through attrition, retirements and job transfers. In the first nine months of 2004, Delphi trimmed between 9,100 and 9,200 jobs, spokeswoman Claudia Baucus said.
Delphi Admits Accounting Flaw
Delphi Corp., the world’s largest auto supplier, said a preliminary internal accounting review found the company improperly recorded a $20-million payment from Electronic Data Systems Corp (EDS) in 2001. In a filing Wednesday with the Securities and Exchange Commission (SEC), the Troy, Mich., company said it also booked $26 million in credits from EDS in 2000 and 2001 for future information technology services when the amount should have been recognized over a longer period of time.
Snap-on Announces Resignation of CEO
Snap-on yesterday announced the resignation of its chairman, president and CEO Dale Elliott, effective immediately. The company’s board of directors has elected Jack Michaels, recently retired chairman and CEO of HNI Corp., to fill the position. Michaels has been a Snap-on director since 1998. When asked, the company declined to provide a specific reason for Elliot’s resignation, however, Richard Secor, a spokesperson for Snap-on, said the resignation was not about a change in strategy, but rather about stepping up the pace of growth. Elliot was with Snap-on for nine years.
Tenneco CEO Calls Automotive Environment ‘Challenging’
Tenneco Automotive Chief Executive Mark Frissora called the automotive environment challenging Wednesday, but said Tenneco is well-positioned regardless. “We are admittedly cautious in our outlook,” Frissora told analysts during a conference call, listing a host of issues ranging from rising steel prices to concerns about vehicle production levels. But “we are in a better position to deal with it than most.”