TRW Automotive Holdings on Tuesday withdrew full year 2008 sales and earnings guidance issued last 31 July and said it now expects a “net loss for its 2008 third quarter on lower than anticipated sales, significantly higher restructuring expenses and increased commodity costs”.
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The tier one supplier said both actual and forecast levels of vehicle production in Europe and North America had declined since its July forecast.
“In addition, the mix shift away from pickup trucks and sport utility vehicles to smaller and more fuel efficient cars in North America and from large and mid-sized passenger cars to small cars in Europe is having a more dramatic impact than previously anticipated.
“The effects of the lower vehicle production levels, mix shift of vehicles produced and the increased commodity costs will negatively impact the company’s second half.”
TRW said it was continuing to adjust capacity and reduce fixed cost structure which would “result in a higher level of restructuring and asset impairment expense in the second half of 2008”.
“It has truly been an unprecedented period for the automotive industry. The challenges of lower production and commodity inflation have worsened in North America and conditions in Europe have now deteriorated,” said TRW president and CEO John Plant.
“We are taking the actions expected in this environment to adjust our cost base to ensure the competitiveness of the business and to align our organisation with changing industry conditions as we move into 2009.”
TRW added it would update its 2008 guidance with its third quarter results due out on 30 October.
