Auto industry braces for slower sales


Published: Saturday, October 1, 2005 at 6:01 a.m.
Last Modified: Friday, September 30, 2005 at 11:40 p.m.
DETROIT - The U.S. auto industry is bracing for an autumn chill.
Analysts predict dismal sales for the Big Three this fall, as rising gas prices eat away at SUVs' popularity. Tensions are high at General Motors Corp., which is pressuring the United Auto Workers to lower health care costs, and Ford Motor Co., which is crafting a new restructuring plan that's likely to include job cuts and plant closures.
The bad news doesn't end there. Delphi Corp., the largest U.S. auto supplier, is threatening to declare bankruptcy by Oct. 17, a move that could set off a wave of other bankruptcies among smaller suppliers.
The Big Three and their suppliers could cut as many as 75,000 jobs before this latest round of restructuring is over, according to Sean McAlinden, chief economist for the Center for Automotive Research in Ann Arbor. Already, GM has said it plans to cut 25,000 jobs before 2008.
''It's our Category 5, our economic New Orleans,'' McAlinden said.
Auto sales are actually healthy overall. Several analysts predict 2005 sales will be around 17 million vehicles, unchanged or up slightly from 2004. September sales figures will be released Monday.
GM and Ford are having a hard time gaining back market share lost to Asian brands, a trend some analysts say is due to their overreliance on sport utility vehicles. Analysts say high gas prices are hastening the demise of SUVs, and some predict SUV sales could be down by as much as 40 percent in September.

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