Michelin Shares Drop as Europe Tire Demand Skids: Paris Mover
Michelin shares declined as much as 4.10 percent, the biggest intraday drop since Oct. 16, and were down 2.3 percent at 1:20 p.m. in Paris. Continental fell as much as 3.8 percent, the most since Oct. 16, and was down 1.2 percent in Frankfurt.
Sales of tires used in new vehicles fell 16 percent in Europe and 2 percent in North America last month, the Clermont- Ferrand, France-based manufacturer said yesterday on its website. Sales of replacement tires dropped 7 percent in Europe and 8 percent in North America, Michelin said.
Auto suppliers are feeling the pinch from the economic downturn in Europe. Car sales in December fell 16 percent in the region, the steepest monthly decline in more than two years, according to the European Automobile Manufacturers’ Association.
“Production is at a standstill at car and truck producers,” said Hans-Peter Wodniok, an analyst at Fairesearch GmbH & Co.
Volkswagen AG’s Audi brand halted production before Christmas and resumed it only around Jan. 10, according to Wodniok, suggesting January will also be “very very slow.”
The slowdown has hit other auto suppliers such as Faurecia, Europe’s biggest maker of car interiors. The company released preliminary annual earnings about a month ahead of the scheduled date as its financial debt swelled to 1.81 billion euros ($2.42 billion) at the end of 2012, from 1.53 billion euros six months earlier.
To reduce spending, companies are slashing jobs. Faurecia, which is 57 percent-owned by PSA Peugeot Citroen, plans to cut about 3,000 jobs in Europe, or 7.5 percent of the workforce, by the end of this year.
Peugeot is eliminating 11,200 jobs in France, or 17 percent of its workforce there, and closing a factory on the outskirts of Paris. General Motors Co. is shuttering a plant in Germany, putting 3,100 positions at risk, while Ford’s European division is halting operations at three factories and cutting 5,700 posts.
To contact the reporter on this story: Mathieu Rosemain in Paris at email@example.com