Ryan Beene, Automotive News
Detroit, Michigan - US automakers and suppliers were hit hard on Monday (21 Jan) as concerns about world economic growth sparked a global sell-off of shares.
Ford Motor Co. stock dropped 4.90 percent as General Motors saw its stock fall 4.51 percent in US market trading a little more than an hour after markets opened.
As of 10:38 am EST, the Dow Jones Industrial Average was down 166 points, or 1.37 percent. Earlier, it had been down more than 400 points, but a move by the Federal Reserve to lower interest rates by 0.75 to 3.5 percent appears to have eased some investor fears of a recession.
Ford ceo Alan Mulally said on Tuesday he was pleased with the "decisive" Federal Reserve rate cut and the automaker would continue to make adjustments as needed.
"I was very pleased, like all of us, that our leadership is really addressing our economy, because it is so important to all of us," Mulally told reporters after a speech at the Automotive News World Congress in Detroit.
Mulally said Ford remains in good shape "liquidity wise" and would continue to watch the U.S. economy and consumer confidence and make changes as needed.
Supplier stocks also got battered in early trading. The biggest loser was Visteon Corp., which saw its stock drop 9.22 percent. Next in line was American Axle & Manufacturing Holdings Inc., down 5.31 less than an hour after US markets opened.
Lear Corp. slipped 4.78 percent while BorgWarner Inc., Magna International Inc., ArvinMeritor Inc., Tenneco Automotive Inc., Gentex Corp. and Autoliv Inc. all saw their stock fall between 3.30 percent and 0.92 percent.
A bright spot was Amerigon Inc., which saw its stock rise 0.75 percent before 10 am EST.
The biggest losers among the European automakers between Friday and Monday were Porsche and Daimler. Porsche stock plunged 7.5 percent while Daimler shares fell 6.7 percent. Of the 28 automakers and suppliers that Automotive News Europe and analyst PricewaterhouseCoopers monitors, 15 saw their stocks slip to their lowest levels in 12 months.
On Tuesday 22 Jan, European stocks tumbled more than 3 percent at the opening bell. This followed Japan's benchmark Nikkei average loss of 5.7 percent the worst one-day loss since the session after the 11 Sept 2001 attacks on the US.
Reuters contributed to this report