Wall Street analysts reportedly lowered their earnings estimates for several automotive industry suppliers on Wednesday, a day after General Motors and Ford said they’ll produce thousands fewer vehicles in the coming months because of disappointing sales.

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According to the Associated Press (AP), Deutsche Bank’s Rod Lache reduced his forecast for nine suppliers, predicting Lear Corp. would take the biggest tumble, from 60 cents a share to break-even – he also lowered his estimate for American Axle & Manufacturing Inc. from 40 cents a share to 25 cents.


At Credit Suisse First Boston, analyst Chris Ceraso reportedly lowered earnings estimates for Delphi Corp., the world’s largest automotive supplier, as well as Lear, American Axle, Magna International Inc. and Superior Industries International Inc.


“The production cuts, particularly at GM, will cripple earnings in the first and second quarters for both the automaker and a number of its major suppliers,” Ceraso wrote in a research report cited by the Associated Press.


AP said suppliers, already pinched by the high cost of steel and automakers’ demands to cut costs, learned on Tuesday they’ll get no relief on the production side in the first half of the year.

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GM, which announced on Tuesday a 12.7% drop in February sales, said it will slash production by 45,000 additional vehicles in the first quarter and roughly 10%, or 139,000 vehicles, in the second quarter to control inventories, the report said – the cuts were less drastic at Ford, which plans to cut production by an additional 10,000 vehicles in the first quarter and 1.2%, or 11,000 vehicles, in the second quarter. Ford announced a 3% decline in February sales.


“Ford did some trimming to its production schedules, but a decent selling month helped it avoid getting out the shears,” Merrill Lynch analyst John Casesa said in a report cited by the Associated Press.


AP added that the Motor and Equipment Manufacturers Association, which represents auto suppliers, turned to the federal government this week for intervention, saying rising steel prices are causing unprecedented bankruptcies and job losses.


Tower Automotive Inc., which declared bankruptcy on February 2, was the latest casualty, the Associated Press said.