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The Automotive Industrys Black October Bleeds into Bleak November

Most Imports Continue to Gain Ground over Less Fortunate Domestics

The automotive industry dubbed last month "Black October" and many wonder, as this month comes to an end what its moniker will be. With labor unrest, announcements of massive job cuts and low sales, November has been quite grim for most carmakers.

According to Reuters news agency, Ford Motor Co. and General Motors Corp. can expect to post more losses when they publish their November U.S. sales results this week. It is reported that the two automakers may experience a decline as large as 15 percent.  Reuters also reports that DaimlerChrysler may also post a loss. According to Merrill Lynch analyst John Casesa, all three are suffering from an "inhospitable market for big trucks and sports utility vehicles."

Large SUVs have been hit particularly hard in recent months, with high fuel prices and changing tastes negatively affecting sales. (Photo: Trevor Hofmann, American Auto Press)

To counteract this phenomenon, domestic carmakers have been announcing various consumer sales incentives. However, some analysts believe it is too little, too late.

Meanwhile north of the border, The Conference Board of Canada says that Canadas auto and auto parts industry will post a loss for the second year in row and expects the industry revenue to drop by 7.7 percent. 
GM hopes that sales of its all-new Chevy Tahoe, and its GMC Yukon and Cadillac Escalade siblings will improve over the outgoing models recent slide. (Photo: General Motors) />"Production fell sharply in the first two quarters of 2005, and overall production in the Canadian industry will decline by 0.4 percent this year. With weak output and declining revenues, profits will barely make it into the black this year," said Louis Thériault, Director of Industrial Outlook.

The board blames low selling prices due to dealer incentives as part of the problem.
This news comes as General Motors announced it will not be filing

General Motors announced it will not be filing for bankruptcy but rather plans to slash jobs across the United States and Canada in an effort to turn any prospects for profitability around. (Photo: Trevor Hofmann, American Auto Press)

for bankruptcy but rather plans to slash jobs across the United States and Canada in an effort to turn any prospects for profitability around. 

"The decisions we are announcing today were very difficult to reach because of their impact on our employees and the communities where we live and work," GM Chairman and CEO Rick Wagoner announced at a press conference on Monday. "But these actions are necessary for GM to get its costs in line with our major global competitors. In short,

"This highlights again the very serious and ongoing crisis that we have in the automotive industry in North America," warned Canadian Auto Workers President Buzz Hargrove. "This is not the end; there will be more to come." (Photo: Rob Rothwell, American Auto Press)

they are an essential part of our plan to return our North American operations to profitability as soon as possible."

A total of nine assembly, stamping and power train facilities and three Service and Parts Operations facilities will cease operations, cutting 30,000 jobs across the two countries. This will reduce GMs assembly capacity by about 1 million units per annum by the end of 2008, in addition to the previously implemented reduction of 1 million units between 2002 and 2005.

Canadian Auto Workers President Buzz Hargrove

The 30,000 North American job cuts represent about 9 percent of GMs global workforce of about 325,000 people. (Photo: Rob Rothwell, American Auto Press)?

told Canadian TV station CTV that the cuts were "devastating."

"This highlights again the very serious and ongoing crisis that we have in the automotive industry in North America," Hargrove warned. "This is not the end; there will be more to come."

But there might be help coming on the horizon for Ontario workers facing cuts, in the form of government intervention. "The Prime Minister of the country is interested and this is not just a union issue or a worker issue," Hargrove told Reuters. "The prime minister of the country understands the importance of it and he assured me he is going to help."

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