UPDATE: BorgWarner CEO Says EU Auto Makers 'Too Optimistic'
13 2월 2009 - 1:40AM
Dow Jones News
The head of BorgWarner Inc. (BWA) said Thursday European auto
makers remain "too optimistic" about demand as it prepares for
further production cuts in the region.
The U.S.-based transmission specialist derives half its revenue
from European auto makers, and Chief Executive Timothy Manganello
said demand in the region remains "like a falling knife." "The
Europeans have been in denial, and I don't mean a river," said
Manganello on a conference call after reporting a fourth quarter
loss.
Manganello said some of the company's European factories are "on
the verge" of moving from a four-day work week to three days, and
said facilities in Germany could operate for a single day or be
idled completely.
BorgWarner has cut production and shed workers, but executives
said it had shrunk to restore margins and position itself for a
return to profitability in 2009.
The company said it is "staffed" for European vehicle production
of 16.6 million this year compared with 21.2 million last year.
U.S. vehicle output is expected to be 9.3 million versus 12.7
million in 2008.
With the outlook for demand from mature markets remaining
uncertain, BorgWarner is diverting resources to China through a new
joint venture.
While emerging market growth has slowed, the company is using
some production from Europe and the U.S. to fulfill orders from
China.
In December, BorgWarner said it would cut 2,900 workers, or 17%
of its work force, because it was "struggling to respond fast
enough" to Detroit's constantly shrinking production needs. The
company also said it would shutter a U.K. drivetrain facility in
2010.
BorgWarner reported a net loss of $81.4 million, or 70 cents a
share, for the December quarter. This compared with net income of
$71.2 million, or 60 cents a share, a year earlier.
The fourth quarter included per-share charges of 56 cents,
largely for the job cuts and 23 cents for other restructuring
moves. Excluding items, the company had break-even earnings.
Net sales skidded to $931.5 million, down from $1.4 billion. The
stronger dollar reduced sales by $114.1 million, and gross margin
plunged to 7.9% from 18.8%.
Analysts polled by Thomson Reuters were expecting a loss of 8
cents a share, excluding items, on revenue of $1.04 billion.
BorgWarner shares were up 5.8% at $19.98.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com
(Mike Barris contributed to this report)