Auto cuts call for steel control in ’08 analysts

Dec 05, 2007 | 02:35 PM |

Two big Detroit-area automakers plan to slash production in the first quarter of next year in a move that might be good business but likely will hurt metal producers.

U.S. automakers need to be disciplined and rein in production amid dire predictions about 2008 auto sales, analysts said, and that means the consolidated steel industry will be challenged to exercise discipline as well.

"We think 2008 is going to be a very, very weak year for car sales," said Catherine Madden, a senior market analyst for North American production at Global Insight Inc., Waltham, Mass. "It's going to be one of the poorest years on record."

With auto sales expected to be down, overall North American production could fall as much as 3 percent to as low as 14.5 million light vehicles in 2008 from roughly 14.9 million units this year, she said. "It's good news in the sense that (Detroit automakers) are not going to let their inventories go crazy. In the past, they would let inventories ride high and then have these insane fire sales."....

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