Tower Automotive Inc. is feeling the effects ofMotor Co. production cuts due to Bridgestone Inc.'s massive Firestone tire recall.
The maker of stamped vehicle frame parts says it will lay off as many as 300 workers at its Milwaukee plant and reduce third-quarter earnings by about 5 cents per share in the wake of's decision to suspend Explorer and Ranger production for two weeks in order to divert new tires to customers clamoring for replacements. The idled workers represent about 10% of the factory's 3,000 employees. Tower makes 8,000 to 8,500 Ranger frames per week, as well as frames for the Explorer, at the Milwaukee plant.
The decision by Ford also is hurting other suppliers such asCorp., Visteon Corp., Corp. and Inc. On Aug. 25 Lear said second-half earnings would be reduced by about 18 cents per share due to the Ford cuts and global currency exchange rates. Visteon last week said its third quarter earnings will be down by about 12 to 14 cents per share. Accordingly, analysts have adjusted their earnings estimates for these suppliers as well as for Ford. Goldman Sachs analyst Gary Lapidus cut his third quarter earnings estimate for the automaker by 6 cents to 52 cents per share, but added that earnings likely will rise in the fourth quarter.
|8/31/'00||% Chg. |
|% Chg. |
Yr. to Date
|Note: This index is a weighted average with a 100-point base figured from 1/2/97. For details see Ward's Automotive Reports — July 31, '00, insert. |
In other supplier news: Gentex Corp. says it has begun shipping interior automatic-dimming mirrors for the Ford F-Series pickup. ArvinMeritor Inc. opens a 60,000-sq.-ft. exhaust systems headquarters and engineering facility in Columbus, IN. The new facility will employ 120 people. Exide Corp. says 300 jobs will be cut as a result of its decision to close 11 North American distribution plants. Exide says the move is part of its pending acquisition of GNB Technologies and will save the company $24 million annually. DaimlerChrysler AG has extended its $583 million tender offer for the purchase of Detroit Diesel Corp. until Sept. 11. The $23 per share cash offer initially was scheduled to expire at midnight, Aug. 25. Johnson Controls Inc. will acquire Gylling Optima Batteries AB of Sweden for $62 million.says all Gylling shareholders will be offered approximately $2.14 per share. Meanwhile, JCI and Polymer Group Inc. enter into a strategic partnership to develop and supply fiber-based products for headliners and other interior components. The companies say the collaboration will benefit both automakers and consumers with improved acoustical properties, lower interior vehicle noise and enhanced aesthetics. Exide Corp. and Corp. intend to co-develop and market interior systems that meet the power requirements and complexity of conventional, hybrid and electrical vehicles.
The European Commission gives the go ahead to the takeover of three Atecs Mannesmann AG companies by Robertand Siemens AG: VDO AG, Dematic AG and Sachs AG. A decision by U.S. antitrust authorities is expected in the coming months. Superior Industries International Inc. plans to double the size of its original equipment aluminum suspension components facility in Heber Springs, AR, to 300,000-sq.-ft. Delphi Automotive Systems Inc. has been granted a 5-year lease agreement by the Marquette County Commission to conduct winter testing at the former K.I. Sawyer Air Force Base. The lease includes 113 acres of former Air Force buildings, runways and grounds, as well as the construction of a 5,000-sq.-ft. engineering garage and office building. & Mfg. Inc. wins a contract to supply driveline systems for a next-generation 4-wheel-drive vehicle. AAM says the driveline system will include unique technologies that provide enhanced traction, stability and handling. Continental Teves NA says it will begin production of intelligent stability and handling systems for the '01 Sequoia sport/utility vehicle. Continental says its Electronic Stability Program will be produced at its brake system plant in Morganton, NC, and its actuation plant in Asheville, NC.
The Ward's Supplier Index fell 1.9% for the week ending Aug. 31. Of the 65 companies tracked, 40 lost ground during the week.