US: AAM strike worries hit share prices
Shares of several auto components suppliers fell on Thursday over concern that the ongoing strike at American Axle & Manufacturing Holdings may force General Motors to idle another plant.
Local union officials told the Associated Press (AP) that GM's assembly complex in Lordstown, Ohio, is running out of a brake part made by American Axle and will be idled on 4 April.
The shutdown at the plant making the Chevrolet Cobalt and Pontiac G5 small cars would affect about 3,750 workers at the GM assembly and stamping plants and nearby parts factories, the AP report noted.
Deutsche Bank's Rod Lache was quoted as saying the month-long strike is the United Auto Workers union's longest since 1998 and added that he didn't expect it to end soon.
"We continue to believe that neither Axle nor GM feel a pressing need to end the strike quickly due to high inventories of GMT 900 pickups and SUVs which we still believe to be over 100 days supply," Lache wrote in a late note to investors earlier this week.
"We believe it would be another four to six weeks before GM dealers experienced shortages, even in geographic pockets."
Lache cut his first-quarter earnings estimates for GM, American Axle, Lear and Magna International, citing lost production resulting from the strike, the Associated Press said.
But he backed his fiscal-year estimates for the companies, saying that lower levels of truck production at GM had already been factored into those estimates.
Shares in American Axle and Lear fell yesterday, as did shares of other suppliers with ties to GM and American Axle such as Tenneco and TRW Automotive Holdings, AP added.
GM and Magna shares posted rises, however.