autos, cars, autos news, us auto suppliers cheer as carmakers relaunch, but long-term worries remain

Roth says RoMan Manufacturing has to get through the next six-to-18 months. — Reuters

DETROIT: Auto parts suppliers across North America said they are encouraged as major automakers accelerate production after coronavirus pandemic shutdowns, but are holding back on hiring and investment because of longer-term uncertainty.

US automakers reopened most assembly plants in late May after states began loosening restrictions, and stronger-than-expected retail auto sales in May have automakers ramping up production of the highly profitable trucks and SUVs consumers are buying.

However, several auto suppliers interviewed by Reuters worry about demand heading into 2021. US and global auto sales are not expected to recover to pre-Covid-19 crisis levels until 2022 or 2023, Bank of America analyst John Murphy said during a presentation on Thursday.

Andreas Weller, CEO of aluminum parts maker Aludyne, sees very strong orders for July, but he laid off more than 10% of his workers because the days of Americans buying 17 million new vehicles a year will not return any time soon.

“What’s the market going to look like for the rest of the year, going into next year? That’s a bigger unknown,” he said.

Magna International Inc CEO Don Walker said orders from automakers were good and the “big unknown” was how consumers respond.

“I’ll be surprised if anybody moves to shut part of the auto industry production down again,” he said at a Deutsche Bank conference on Thursday.

Hiring freezes

Other concerns include the potential for smaller parts makers to fail and bring production to a halt, and the possibility of another Covid-19 outbreak in the fall.

“We don’t know what the world is going to be,” said Joe Perkins, chief executive of engineering and machining firm Busche Performance Group, which counts General Motors Co and Ford Motor Co among its customers. “I’m very hesitant to predict where the market goes through the balance of 2020 and 2021.”

Most of the 11 supplier executives contacted by Reuters said they are closely watching spending, in some cases laying off or slowly recalling furloughed workers, implementing hiring freezes and delaying capital spending.

In the short term, suppliers said they welcome the accelerating pace of production as automakers try to restock depleted showrooms. Ford said on Wednesday it expected its U.S. assembly plants to regain pre-COVID-19 operating levels by early July.

“They’re basically ramping up to full production … quicker than we thought,” said John Dunn, Americas CEO for Clean Energy Systems, a Plastic Omnium unit that makes fuel and emissions-reduction systems.

The happiest suppliers are those building pickup trucks and SUVs as demand continues to shift from sedans, said Pierre Labat, vice president of global auto for aluminum provider Novelis Inc, which is owned by India’s Hindalco Industries Ltd.

Some product-development plans have been delayed by the outbreak, or cancelled in some cases like the electric vehicle Ford’s Lincoln brand was going to build with Rivian. Bob Roth, co-owner of RoMan Manufacturing, which builds tooling and equipment, lost that job.

“I would be hard-pressed to place my bet at the moment, which puts me in the cautious camp,” Roth said. “We’ve just got to get through the next six-to-18 months.”

The pressure on automakers to reduce CO2 emissions through electrification is a bright spot for some suppliers.

“Automakers realise this isn’t a game of poker,” said Andrew Storm, CEO of Eckhart Inc, which builds robots and automated tools for GM, Tesla Inc and others.

“Either they commit the capital or the disruptive forces of innovation obliterate their long-term existence into the bin of history.”

Keyword: US auto suppliers cheer as carmakers relaunch, but long-term worries remain

CAR'S NEWS RELATED

2023 Kia Sportage, Toyota BZ4X headlines this week's new car reviews

The 2023 model year ramps up with Toyota’s first dedicated electric vehicle and Kia’s first hybrid iteration of its bestselling Kia Sportage. Here’s what else moved us this week.  The Sportage sizes up for 2023, with sharper, more futuristic styling, a hybrid model, and new rugged X-Pro trims. It ...

View more: 2023 Kia Sportage, Toyota BZ4X headlines this week's new car reviews

This 2022 Kia SUV Comes In Dead Last in Rankings

The 2022 Kia Sorento is one of Kia’s popular SUVs. It’s a three-row midsize SUV with plenty of room and a stylish exterior. Yet things with the Kia Sorento are not all great. Consumer Reports reviews of the 2022 Kia Sorento have it in last place of all midsize three-row ...

View more: This 2022 Kia SUV Comes In Dead Last in Rankings

Spain: Plug-In Car Sales Maintain 10% Share

The Tesla Model 3 appears to be the most popular BEV model in early 2022. New passenger car registrations in Spain decreased in April by 14% year-over-year 70,393, after a 31% decrease in March, resulting in 61,225 sold that month. A similar situation is noted also in other European markets ...

View more: Spain: Plug-In Car Sales Maintain 10% Share

Florida Man WaterskiIs Barefoot Behind a Formula One Car on Its Way to the Miami Grand Prix

The team at Red Bull Racing sure has fun in their Formula One cars for the “Road Trips” video series. Episodes range from Max Verstappen ice racing on spiked tires to Daniel Ricciardo blasting across the USA at top speed. For the first-ever Miami Grand Prix, Red Bull driver Sergio ...

View more: Florida Man WaterskiIs Barefoot Behind a Formula One Car on Its Way to the Miami Grand Prix

Hot Tires Alert: The Jeep Wrangler 392 Is Getting a Burnout Mode

Some people like to make an entrance, but with the Jeep Wrangler Rubicon 392, you can create one heck of an exit. Word on the street is that the 2022 Jeep Wrangler 392 and the Ram 1500 TRX could be getting a 4LO burnout mode.  The Jeep Wrangler 392 gets ...

View more: Hot Tires Alert: The Jeep Wrangler 392 Is Getting a Burnout Mode

Happy Mother's Day: One Thing Is For Sure, Elon Musk Loves His Mom

Musk told reporters at the recent Met Gala that he only attended because his mom wanted to go, so, of course, he took her. This article comes to us courtesy of EVANNEX, which makes and sells aftermarket Tesla accessories. The opinions expressed therein are not necessarily our own at InsideEVs, nor ...

View more: Happy Mother's Day: One Thing Is For Sure, Elon Musk Loves His Mom

Tata Nexon EV Ready To Launch On May 11

Tata Motors is all set to announce the long-range Nexon EV prices on May 11, 2022. According to sources, the long-range Nexon EV will get a 30 percent larger battery than the current model and will have a claimed range of around 400km. It will also have some new ...

View more: Tata Nexon EV Ready To Launch On May 11

Peugeot Sport’s 9X8 hypercar won’t be in Le Mans race, to debut later in 2022 WEC season

Last year, when Peugeot Sport announced its new program to develop the 9X8 hypercar for endurance racing, it expected to join the World Endurance Championship in 2022. However, the team decided to forego the first two rounds, at Sebring and this weekend at Spa-Francorchamps, and was planning to debut ...

View more: Peugeot Sport’s 9X8 hypercar won’t be in Le Mans race, to debut later in 2022 WEC season

Only 1 Dodge Model Is Recommended by Consumer Reports

Do You Need an OBD2 Scanner?

Tesla Model 3 Performance Puts Up A Great Fight Against Lamborghini Urus

Why ‘really tough’ Miami strategy will have F1 teams thinking

Howell Is Elite At Rocket Raceway Park

2022 Maruti Suzuki XL6 with a wide-body kit: What it’ll look like

Rosario Highlights NOW600 Winners At Port City

Cummins Wins POWRi At Macon Speedway

Anderson Wins Again In Salt Lake City; Craig 250SX Champion

Laney Wins, Claims California Clash Title

Twitter to have “extreme” work ethic expectations for its employees, says Musk

Toyota Land Cruiser 300 Looks Menacing With Carbon Fiber Body Kits

OTHER CAR NEWS

;
Breaking thailand news, thai news, thailand news Verified News Story Network