The struggling North American auto industry is continuing to make an impact, with auto supplier Johnson Controls Inc. noting that its future sales expectations have dropped by $500 million just in the past few months.
It is not alone. Competitor Lear Corp., a Southfield, Mich.-based automotive seating and electronics supplier, recently reduced its 2008 sales expectations by $1 billion. to $14 billion.
Glendale-based JCI, told analysts in New York on Oct. 14 that its auto interiors book of business work already awarded for future vehicle production is now at $4.5 billion, down from $5 billion just this summer.
Beda Bolzenius, president of JCI's Auto Experience interiors unit, blamed the decrease on production slashes from North American carmakers. The reduced level still is a record for JCI, but reflects a drop the company first predicted in September.
JCI now is basing its business on a ``very conservative'' North American production level of 13.9 million passenger vehicles this year, and 12.3 million in 2009. The auto industry made 15.4 million cars and trucks in North America in 2007.
JCI already has announced a global restructuring to bring its manufacturing in line with the expected slowdown. In Europe, the company expects the industry to produce 22.5 million cars and trucks this year, with manufacturing dropping to 21.2 million in 2009 though some Eastern European regions may see an increase, executives said.
The firm had expected a slowdown this year but the first part of 2008 beat expectations, while the past ``30-60 days'' have been worse than expected, said Chairman and Chief Executive Officer Steve Roell.
JCI, which also makes batteries and heating and air-conditioning systems for buildings, said it projects global sales of $37 billion for 2009 3 percent lower than its expected final sales for this year.
Lear announced Oct. 15 that it has targeted $150 million worth of improvements designed to cut expenses because of the slowing auto market. It was not specific but noted that by Oct. 31 it will announce cost-cutting measures that include job cuts and temporary layoffs, as well as reducing product development costs and consolidating its supply base.
Executives said they still expect Lear to turn a profit this year, and expect the industry to recover in 2010 in North America and Western Europe.