BorgWarner has reported fourth quarter sales down 32% to $931.5m and net loss of $81.4m or $0.70 per share.
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“The company generated record first half performance, but full year results were affected by deteriorating global economic conditions and the sharp decline in worldwide auto production in the second half of the year. [It] has undertaken aggressive cost structure adjustments in anticipation of continued difficult industry conditions in 2009 and its capital structure remains strong,” the supplier said in a statement.
One-off charges included goodwill impairment related to the BERU acquisition, restructuring expenses, a “transmission product related warranty charge associated with a product sold in Europe, limited to production from mid-2007 through May 2008”, and various tax related charges.
“Cost structure adjustments” included workforce and workweek reductions, extended holiday shutdowns and plant closings.
Full year sales were off just 1% to $5,26bn as worldwide auto production declined 4%. The net loss was $35.6m or $0.31 a share.
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By GlobalData“Our full-year results were hurt by the worldwide economic deterioration that led to significantly reduced global auto production in the second half of the year,” said chairman and CEO Timothy Manganello
“Entering 2009, we have already undertaken significant restructuring actions in North America and Europe,” Manganello added. “These initiatives included reducing our workforce by approximately 4,400 employees or 24% from mid-2008 levels, instituting four-day work weeks in many of our European operations, and shutting down our worldwide operations for at least one month over the year-end holidays.
“Additionally, we are proactively modifying our operations to respond to ever-changing customer and business needs.”
BorgWarner said its “visibility into 2009 is limited until customer schedules stabiliise.
“However, based on an assumption of North American vehicle builds of 9.3m units for 2009 and total European vehicle builds of 16.6m units, the company expects to generate positive earnings and positive cash flow from operations for the full year 2009.
“In both North America and Europe, the company expects first quarter industry volumes to be lower than those in the fourth quarter of 2008, the result of global customer schedule reductions and extended customer plant shutdowns.”
