U.S. bailout collapse shakes worldwide auto industry

The breakdown of a planned bailout for U.S. automakers is starting to hit manufacturers in other countries.

Izvor: VOA

Saturday, 13.12.2008.

11:13

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The breakdown of a planned bailout for U.S. automakers is starting to hit manufacturers in other countries. U.S.-based General Motors said Friday three plants in Mexico and three plants in Canada will close temporarily as it slashes production to cut costs. U.S. bailout collapse shakes worldwide auto industry The president of the Canadian Auto Workers union Ken Lewenza said about 30,000 people will be without work for weeks, and that millions of jobs are at stake. Canadian officials said they are considering aid for the auto industry. And European leaders are being urged to help, too. European auto companies said the effects of a collapse will spread. BMW's chief executive Norbert Reithofer told Bloomberg news "you can't underestimate" the impact. Automakers and parts suppliers in India are also worried. Indian car sales fell by almost 20 percent in November. Suppliers said the collapse of a U.S. car company could have a drastic impact on exports, both to the U.S. and to Europe. GM's Indian unit has been trying to calm jittery workers and investors. The company issued a statement Friday, saying the U.S. Senate's rejection of a bailout package will not affect its Indian operations. Ford is also downplaying the impact on India. A Ford spokeswoman told the Press Trust of India the company's investment plans for India have not changed. Earlier this year, Ford announced it would invest $500 million in its Indian operations. Some countries have already moved to stabilize their car makers. Earlier this week, Sweden said it would give Volvo and Saab more than $3 billion in emergency loans. The Big Three U.S. automakers, GM, Ford and Chrysler, are also looking to other governments for help. GM and Ford are among a group of carmakers that have approached European governments for about $50 billion in loans. Meanwhile, the slumping global economy is also forcing non-U.S. carmakers to cut back, impacting plants in the U.S. Honda announced Friday it will reduce production by its U.S. plants because of declining sales.

U.S. bailout collapse shakes worldwide auto industry

The president of the Canadian Auto Workers union Ken Lewenza said about 30,000 people will be without work for weeks, and that millions of jobs are at stake.

Canadian officials said they are considering aid for the auto industry. And European leaders are being urged to help, too. European auto companies said the effects of a collapse will spread. BMW's chief executive Norbert Reithofer told Bloomberg news "you can't underestimate" the impact.

Automakers and parts suppliers in India are also worried. Indian car sales fell by almost 20 percent in November. Suppliers said the collapse of a U.S. car company could have a drastic impact on exports, both to the U.S. and to Europe.

GM's Indian unit has been trying to calm jittery workers and investors. The company issued a statement Friday, saying the U.S. Senate's rejection of a bailout package will not affect its Indian operations.

Ford is also downplaying the impact on India. A Ford spokeswoman told the Press Trust of India the company's investment plans for India have not changed. Earlier this year, Ford announced it would invest $500 million in its Indian operations.

Some countries have already moved to stabilize their car makers. Earlier this week, Sweden said it would give Volvo and Saab more than $3 billion in emergency loans.

The Big Three U.S. automakers, GM, Ford and Chrysler, are also looking to other governments for help. GM and Ford are among a group of carmakers that have approached European governments for about $50 billion in loans.

Meanwhile, the slumping global economy is also forcing non-U.S. carmakers to cut back, impacting plants in the U.S.

Honda announced Friday it will reduce production by its U.S. plants because of declining sales.

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