General Motors COO says US auto industry is in a recession
July 21st, 2008 | by Manufacturing Business |General Motors COO says US auto industry is in a recession.
Henderson said the 11-week strike at parts supplier American Axle and Manufacturing Holdings Inc. has had only a minimal effect on the company”s retail sales, largely because it had built up a large inventory of pickup trucks and sport utility vehicles at a time when the market shifted to smaller vehicles.
American Axle makes axles, drive shafts and stabilizer bars mainly for GM”s larger vehicles.
Henderson said the strike cost GM US$800 million in earnings before taxes in the first quarter, and he said the company agreed to American Axle”s request to kick in $200 million to help end the work stoppage by the United Auto Workers.
‘We agreed to do that because we think it would be the most helpful thing we could do’ to end the strike, Henderson said. ‘We”re working hard to not be involved in those day-to-day negotiations.’
Mike DiGiovanni, GM”s executive director of global market and industry analysis, told the conference the economy will rebound in the second half of the year but the pace would be sluggish.
