Auto parts maker Robert Bosch announced job cuts on Thursday and German rival Continental prepared to tighten its belt as world No 1 carmaker Toyota suffered a further slump in sales. The part makers' statements came as Italy's Fiat SpA reported a first-quarter trading loss and said it was still in talks to form a partnership with ailing US carmaker Chrysler.
-- Bosch sees 2009 as 'most difficult year'
-- Continental to disclose strategic plan in 100 days
-- Faurecia says do not expect rapid recovery
-- VW sees it and Porsche forming a 'centre of power'
-- Fiat among possible investors in GM's Opel
The Italian carmaker also emerged as a likely buyer of a stake in General Motors' German unit Opel. Bosch, the world's biggest car parts supplier by sales, said it would slash jobs this year in Germany and abroad as its sales slump as much as 15 percent amid a sector-wide crisis.
"For 2009, Bosch expects one of the most difficult years in the company's history, with substantial risks to sales and earnings," Chief Executive Franz Fehrenbach told a news conference on Thursday, forecasting a loss before taxes, said it would present investors with an overall strategic plan in the next 100 days at the latest.
Speaking to the Continental annual general meeting on Thursday, chief executive Karl-Thomas Neumann said management needed to shed light on the direction of its shaky alliance with controlling shareholder Schaeffler as well as the future of its Rubber Group.
Continental's Neumann, speaking for the first time as CEO at the company's AGM, said it remained unclear how Continental and Schaeffler would cooperate in future. The 11.8 billion euro ($15.4 billion) syndicated credit line renegotiated in January, and in particular a 3.5 billion euro tranche due for repayment in August 2010, continue to cause headaches for management, Neumann said. "We have been able to comply with the covenants in the first quarter of this year, however it remains a major challenge to hold to the limits agreed upon for the remainder of the year," he said.
"Our confidence that we can successfully deal with this is unshaken." He said Continental was still examining whether a sale of assets - mainly tyre activities bundled in the Rubber Group - would be the best way to pay off the tranche due in August of next year.
French parts maker Faurecia told investors not to expect a rapid recovery. Volkswagen AG Chief Executive Martin Winterkorn, meanwhile, hailed co-operation with majority owner Porsche and reiterated he expected a group profit in 2009 despite a car market slump.
"Our integration has come a long way in the last few months and I am sure that we will be able to drive our partnership forward in 2009, a difficult year for the auto sector," he said in remarks prepared for VW's annual shareholders meeting.
Winterkorn told shareholders the company and Porsche together had the potential to become "the centre of power for the international automobile industry". Parts maker Bosch's job cut plans go beyond its current programme of shortening work hours by cutting jobs in Germany, its CEO said. Bosch has already cut 3,000 of its 282,000 employees abroad. The number of layoffs will increase "significantly", Fehrenbach said.
Bosch said it expects automotive production world-wide will fall by at least 10 percent. Rival European automotive suppliers Continental AG and Valeo have also been cutting jobs to try to weather the storm. Toyota Motor Corp said earlier on Thursday its group-wide sales fell 27 percent to 1.767 million vehicles in the first quarter of 2009, but still keeping it ahead of Volkswagen as the world's top-selling carmaker. The gap in group-wide sales between Toyota and Volkswagen shrank to 363,000 vehicles in the January-March quarter from 840,000 a year earlier.
Hyundai Motor Co, South Korea's top automaker, reported a smaller-than-expected 43 percent fall in quarterly net profit as a weak won cushioned it from higher marketing costs and drop in sales caused by the global crisis. Hyundai said it expected to further expand its share in the key US market, where its line-ups of smaller, cheaper vehicles such as the Elantra compact and Sonata sedan have won more cost-conscious customers.