More auto losses likely
Earnings reports due next week
October 13, 2005
BY JOE GUY COLLIER
FREE PRESS BUSINESS WRITER
Delphi Corp.'s bankruptcy and the money-losing automaking operations of General Motors Corp. and Ford Motor Co. mean Michigan automotive workers should brace for more layoffs and tougher times for months, if not years, to come.
The automotive companies are to begin reporting next week how well they did or didn't do for the last three months. Ford, GM and many automotive suppliers are expected to lose money, say financial experts who follow the industry.
These earnings reports spell trouble for Michigan because companies that lose money eventually have to stop the gap, often by cutting jobs or lowering wages and benefits.
Ford and GM have attempted to fight losses by offering deep discounts on their vehicles but that's just made it harder to turn a profit. It also does nothing to address the looming problems of high pension, wage and health care costs.
The bankruptcy of Delphi, the largest U.S. supplier, signals that Michigan's automotive industry is headed for a shakeup, said Patrick Anderson, a principal with the Anderson Economic Group in East Lansing.
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