STRUGGLING with the AFTERMATH

Many of the world's automakers already were decelerating for a recessionary curve when the devastating Sept. 11 terrorist attacks on New York's World Trade Center and the Pentagon in Washington stopped the industry dead in its tracks.

Some auto plants halted operations. Others paused for a moment of silence to remember the thousands of dead and to comprehend the unspeakable horror.

U.S. automakers stepped up security for their employees at home and overseas, with General Motors Corp. withdrawing 20 employees and their families from Saudi Arabia and the United Arab Emirates. U.S. border crossings wound down to a crawl due to strict vehicle inspections, playing havoc with just-in-time production. By October, with the American-led air raids on Afghanistan's Taliban under way, an industry reverberation could be heard.

Western Europe's car companies, already suffering declines, battened down the hatches. Fiat Auto SpA warned in early October that it would not meet its 2001 operating profit and debt targets because of weakening economies and a slowdown in car sales. DaimlerChrysler AG said its profit targets too were at risk. Renault SA temporarily idled two plants in Spain, adding to six closures it planned in France and Brazil. Volkswagen AG, which saw sales drop 18.8% in September, shut down assembly plants as well.

In South America, Brazil's automakers, heavily dependent on exports to North America and Europe, saw vehicle sales tumble 23% in September from the year-ago period, marking the worst month for sales since January 2000. In Asia/Pacific's leading car market of Japan, economic conditions grew increasingly severe as the downdraft from the U.S. tragedies sent a chill across the region.

Troubled automakers throughout the world chopped sales estimates and cut production to combat shrinking sales. A few increased temporary production stoppages and offered voluntary severance packages to workers. There was some good news, as the U.K.'s car market held its ground. And India and China's isolated auto sectors looked to meet their year-end objectives as well.

In this, the first of a two-part installment on the State of the Industry in 2002, WAW takes a look at the impact of Sept. 11 events on the global front.

There's no question that the horrific blow to the U.S. economy and the ensuing uncertain times have brought to the global auto industry a fundamental change of a magnitude yet to be determined. The only thing anyone can do is to struggle through the aftermath and hope for better times.