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Car-parts supplier (Land Rover, Jaguar, Aston Martin) - 'Jobs safe' short term

The head of Herefordshire car parts firm Polytec Holden has said jobs at his company are safe even though an MP has asked for government help.

He said the problem faced by the car parts company was a long-term, cash flow issue created by their clients, relating to the way car makers required component suppliers to invest in expensive machinery to make car parts.

Managing Director Geoff McGladdery said he would welcome the help but said the company was still in profit.  He said the threat to jobs was in the long term and not "today or tomorrow".

Leominster MP Bill Wiggin had asked the government to help save 225 jobs at Polytec Holden, Bromyard, during Prime Minister's Questions on Wednesday.

Mr Wiggin asked the leader of the Commons, Harriet Harman, to arrange a meeting between the Business Secretary Lord Mandelson and the company, which supplies clients such as Jaguar Land Rover and Aston Martin.

Mrs Harman agreed and said the government was "determined to make sure we help those who are working hard in important British industries like the automotive industry."

Mr McGladdery said he was grateful to the MP for raising the issue in the Commons but he didn't want to give the impression the company "was about to go bust".  He said he expected Polytec Holden to make a profit at the end of the first quarter of this year.

Mr McGladdery added : "The equipment can cost up to £1m and is the exclusive property of the car maker, but we need to use it to make their parts. When the car manufacturer takes delivery of the parts they pay us for that equipment.  I don't want a handout for me. We are not a lame duck. But the banks have told us we won't lend you money to lend to your customers. If we can't borrow money to complete the orders then in the long term we won't have much business."

Car parts jobs hang in the balance at Honda, Toyota, Land Rover & Jaguar Supplier

More than 120 jobs were hanging in the balance at a Shropshire car parts manufacturer.  Car Parts firm Shimizu Industry UK revealed plans to close its plant in Hortonwood, Telford, which employs 124 workers, and transfer all its business to a sister site in Welshpool.  The parts company, which makes injection-moulded plastic parts for customers such as Honda, Toyota, Land Rover and Jaguar, said “significant” job losses were expected.

A statement from the firm blamed the global economic crisis for the downturn in orders.  It said: “The company has entered into a three-month consultation period with its employee representatives.  Employees of Shimizu Telford and Welshpool plants have been on short time working since October 2008 in a bid to try and reduce overheads and minimise the risk of redundancies.

“However, significant losses from ongoing reduced orders can no longer be sustained and major restructuring is necessary in order for the company to survive.”.  Last month, the Welsh arm of the company, which employs 125 people, was one of the first two businesses in Wales to get help from the Welsh Assembly’s £68 million ProAct scheme.

The initiative helps employers deal with a fall off in orders and to provide an alternative to redundancy by offering wage subsidies of up to £2,000, and £2,000 of funding for training for up to 100 workers.

Only yesterday the Government revealed it would be extending the ProAct Scheme to England for a six-month trial from April.

But Mark Pritchard, The Wrekin MP, said: “Ministers should have taken action far earlier which may have saved these jobs. The Government has acted too slowly."

Yet another story about car parts jobs being lost - brought to you by Find a Part - Car Parts Search Specialists since 1978.

Ford car prices up due to weak pound

Car giant Ford has been forced to put up prices as a result of the weak performance of the pound against other currencies.

Ford - The UK's top-selling car firm  - is in a "battle for survival", and a spokesman said that average increases of 3.75 per cent would add up to £1,000 to the cost of a car, according to a report from the Mirror.

Fords' managing director for Britain, Nigel Sharp, said the weak pound had driven up the cost of importing car parts - and claimed their rivals would follow suit.

The move comes 24 hours after Honda UK staff were warned they could follow Toyota's lead by imposing a 10 per cent pay cut.

Mr Sharp denied Ford, which has already laid off 850 staff and introduced four-day weeks at one plant, is ripping people off.

He said: "It is regrettable but we had to do it to survive. We would rather sell one car for a profit than 1,000 at a loss.

"It's the same problem facing the vast majority of the industry."

Ford prices rise on April 1 and will add £50 to a Ford Ka and £1,000 to a Ford Focus Coupe convertible.

Ford Fiestas will go up 6.1 per cent and Ford Mondeos 3.3 per cent.

New car sales fell 22 per cent last month, the Society of Motor Manufacturers and Traders reported, though Ford suffered only a 12 per cent downturn.

Mr Sharp added this rise is "not the end of the story", hinting more rises could be on the way.

This story brought to you by Find a Part - Car Parts Search Specialists since 1978.

USA - Car parts suppliers win $5bn government guarantee

American car parts suppliers were given a guaranteed $5bn in federal financing by the US Treasury's car taskforce on the 19th March, in a deal that protects the core of the industry but could spell the end for weaker companies.

The Financial Times reports that the loan guarantee package is much smaller than car parts suppliers requested but was broadly welcomed by the automotive industry and investors. Shares in large car parts suppliers rose sharply.

"The programme will provide supply companies with much needed access to liquidity to assist them in meeting payrolls and covering their expenses, while giving the domestic auto companies reliable access to the parts they need," said Tim Geithner, the Treasury -secretary.

Car Parts Suppliers had asked for $10.5bn of federal loan guarantees to back their accounts receivable from the "Detroit 3", General Motors, Ford Motor and Chrysler, which were no longer being accepted by banks as collateral for new loans.

The car parts suppliers submission to the Treasury included a request for government loan guarantees worth $8bn and $7bn to create a "quick pay" scheme.

Under the support plan outlined yesterday, which applies only to American companies, suppliers will be able to get government-backed credit insurance for money owed by General Motors ( Vauxhall in the UK) and Chrysler. They will also be able to sell receivables to the scheme for cash at a "modest discount".

General Motors and Chrysler will choose which car parts suppliers are eligible for the scheme. Ford has the option of participating. Car makers are expecting a flood of suppliers to lobby to be included in the scheme.

Report compiled by Find-a-Part Car Parts Search Specialists since 1978.

New Car Sales Slump in the USA - Is Depreciation a Factor ?

US car sales continue to slump, with american consumers apparently unwilling to stomach the large loss in value of new cars after the first year of ownership. A lack of available finance has been mainly responsible for the slowdown of car sales, but when as much as a third of the cost of the overall cost of ownership can be spent by simply driving off the forecourt ( according to "Cost to Own" figures produced by aol.autos.com in conjunction with Vincentric), who can blame American consumers for thinking twice before buying new ?

Top 10 Selling US Cars (Dec / Jan 2009)

1 - Ford F-150
Jan 2009 Sales : 25,237
VS Jan 2008 : -38.6 %
Fuel Economy Range : 19 mpg Hwy, 14 mpg City
Cost of ownership per year :
Year 1 : $18,600
Year 2 : $5,002
Year 3 : $4,854
Year 4 : $4,714
Year 5 : $5,700
Total : $38,871
Year 1 Depreciation $13,139 (33.8% of 5 year cost of ownership)

2 - Chevrolet Silverado 1500
Jan 2009 Sales : 23,987
Vs Jan 2008 : -33.6 %
Fuel Economy Range: 19 mpg Hwy, 14 mpg City
Cost of Ownership Per Year
Year 1 : $18,785
Year 2 : $5,329
Year 3 : $5,057
Year 4 : $5,015
Year 5 : $5,685
Total : $39,873
Year 1 Depreciation : $13,169 (33.0% of 5 year cost of ownership)

3 - Dodge Ram
Jan 2009 Sales : 12,843
Vs Jan 2008 : -35.5 %
Fuel Economy : 20 mpg Hwy, 14 mpg City
Cost of Ownership Per Year
Year 1 : $21,017
Year 2 : $5,331
Year 3 : $5,329
Year 4 : $5,381
Year 5 : $6,125
Total : $43,184
Year 1 Depreciation : $15,036 (34.8% of 5 year cost of ownership)

4 - Chevrolet Malibu
Jan 2009 Sales : 9,312
Change vs Jan 009 : -34%
Fuel Economy Range: 30 mpg Hwy, 22 mpg City
Cost of Ownership Per Year
Year 1 : $13,318
Year 2 : $4,298
Year 3 : $4,047
Year 4 : $4,311
Year 5 : $4,869
Total : $30,845
Year 1 Depreciation : $ 8,882 (28.8% of 5 year cost of ownership)

5 - Ford Escape
Jan 2009 Sales : 8,360
Change vs Jan 2008 : -25.3 %
Fuel Economy Range: 28 mpg Hwy, 22 mpg
City Cost of Ownership Per Year
Year 1 : $12,744
Year 2 : $4,802
Year 3 : $4,094
Year 4 : $4,098
Year 5 : $4,796
Total : $30,537
Year 1 Depreciation : $8,365 (27.4% of 5 year cost of ownership)

6 - Ford Fusion
January 2009 Sales: 8,152
Change vs. January 2008: -11.2%
Fuel Economy Range: 29 mpg Hwy, 20 mpg City
Cost of Ownership over 5 years :
Year 1 : $12,533
Year 2 : $4,431
Year 3 : $4,292
Year 4 : $4,457
Year 5 : $5,252
Total : $31,810
Year 1 Depreciation : $8,910 (28% of 5 year cost of ownership)

7 - GMC Sierra
January 2009 Sales: 8,020
Change vs. January 2008: -39.2%
Fuel Economy Range: 19 mpg Hwy, 14 mpg
City Cost of Ownership over 5 years :
Year 1 : $19,323
Year 2 : $5,376
Year 3 : $5,112
Year 4 : $5,068
Year 5 : $5,750
Total $40,631
Year 1 Depreciation : $13,609 (33.5% of 5 year cost of ownership)

8 - Ford Focus
January 2009 Sales: 7,769
Change vs. January 2008: -33%
Fuel Economy Range: 35 mpg Hwy, 24 mpg City
Cost of Ownership over 5 years :
Year 1 : $9,816
Year 2 : $3,849
Year 3 : $3,744
Year 4 : $3,832
Year 5 : $4,419
Total : $25,663
Year 1 Depreciation : $6,148 (24.0% of 5 year cost of ownership)

9 - Chevrolet Impala
January 2009 Sales: 7,062
Change vs. January 2008: -61.8%
Fuel Economy Range: 29 mpg Hwy, 19 mpg City
Cost of Ownership over 5 years :
Year 1 : $16,653
Year 2 : $4,970
Year 3 : $4,720
Year 4 : $4,841
Year 5 : $5,789
Total : $36,975
Year 1 Depreciation : $11,741 (31.8% of 5 year cost of ownership)

10 - Jeep Wrangler
December 2008 Sales: 6,362
Change vs. December 2007: -66%
Cost of Ownership over 5 years :
Year 1 : $14,513
Year 2 : $5,667
Year 3 : $5,230
Year 4 : $4,957
Year 5 : $5,713
Total : $36,082
Year 1 Depreciation : $9,253 (26.4% of 5 year cost of ownership)

Report compiled by Justin Woodcock on behalf of Find-a-Part - now available for Auto Parts in the USA and Canada !

Vauxhall & Opel car sales hurt by state aid confusion

The public debate over a bail-out of Car manufacturer Opel is hurting its business, analysts warned on Monday, just as the German economy minister began a US mission to help the ailing carmaker.

Opel and British Vauxhall car sales dropped by 21.9 per cent on a yearly basis in February, more than the European market average of 18 per cent.

 “This indicates that the company’s much-publicised troubles are beginning to hurt its ongoing sales operations,” he warned.

“Whatever course of action the German government ... opts to take in rescuing Opel and Vauxhall, it should do so quickly,” Mr Urquhart said.

Story brought to you by Find-a-Part, Vauxhall Parts Search Specialists since 1978.

Car industry demands more government help, Toyota cuts hours, Land Rover gets grant

Ministers faced demands for urgent action to support car and car parts manufacturers following a meeting with the industry last Wednesday, as Toyota announced a 10 per cent cut in pay and hours for its UK workers.

The Japanese company’s move, due to take effect on April 1, is an indication of the wider problems that the car and car parts industries face.  Sharp falls in demand caused by a lack of loans from banks and employment uncertainty are forcing car companies to cut production and jobs.

“The big risk is that we end up destroying one of the few world-class manufacturing sectors that we have here in the UK, not for the next four or five years but for good,” said Paul Everitt, the chief executive of the Society of Motor Manufacturers and Traders, when speaking to the Financial Times. 

Ian Pearson, the business minister, set up a meeting of car makers, car supply companies and banks to encourage them to apply for aid under the scheme.  Officials set out detailed criteria for the scheme, which centres on £2.3bn of government guarantees for loans to back low carbon research and development.

One attendee said after the event that “realistically, it will be one to three months” before loans start to be made under the scheme, first announced back in January, which could amount to a six month wait for an industry that needs immediate financial help.

Lord Mandelson, the business secretary, unveiled a £27m government grant for Jaguar Land Rover to coincide with Wednesday’s summit. The funding, designed to support a £400m project to develop a new, greener Land Rover vehicle, has been agreed under the business investment scheme. It was “not at all” a form of covert bail-out for the company, the government insisted.

The industry on Wednesday welcomed the government’s commitment to the £2.5bn R&D package. But it said the scheme would not be a substitute for necessary short-term support measures.

The British Chambers of Commerce said: “There has been much talk about helping the industry but we now need to see action.”

Story brought to you by Find-a-Part, Car Parts Search Specialists since 1978.

£2000 Car Scrap scheme "Almost certain to push up average cost of cars" - Transport Expert.

According to an article in todays' Times Online , plans to give drivers £2,000 to trade in an old car for a new one will help to prop up car plants in France and Germany but do very little to protect British jobs.

The article, based on an interview with Professor Rhys, of Cardiff University Business School, points out that the plan which is currently at an advanced stage, would fail to help British businesses because only 4 per cent of the cars bought u0nder the car scrappage scheme would be made in Britain.

Lord Mandelson plans to spend up to £500 million on the scheme after being impressed by the success of scrappage grants elsewhere in Europe.

But Professor Rhys points out that such a move would ignore a unique feature of the British car industry: 78 per cent of cars made here are exported and 86 per cent of cars bought here are imported.

The situation is quite different in other countries that have introduced scrappage schemes. In Germany, where drivers receive €2,500 (about £2,300) for scrapping a car that is at least nine years old and buying one less than a year old — more than 65 per cent of cars bought are made in German factories.

French factories account for 62 per cent of cars sold in France, where the Government is offering €1,000 for trading in an old car.

Professor Rhys said that any potential benefit of the scheme to the British car industry was further eroded by the absence of small, cheap models made in this country. Experience on the Continent shows that almost all drivers taking part in the scheme would spend their £2,000 grant on a small, highly fuel-efficient car.

Professor Rhys is quoted as saying : “A person who has been driving a nine-year-old car is not going to be able to afford a Jaguar, a Land Rover or even a Toyota Avensis (built in Derby). “We only make two cars that they are likely to buy: the Nissan Micra and the Mini, and these account for 4 per cent of the British market. A scrappage scheme would result in the British taxpayer subsidising vehicle factories in other countries.”

British car dealers would benefit from the scheme, Professor Rhys said, but were likely to take advantage of the grants to reduce the discounts they were currently offering.

“The scheme is almost certain to push up the average retail cost of cars,” he said.

“If people try to say it’s got anything to do with rescuing the British motor industry they either don’t know what they are talking about or they are being disingenuous.”

The Treasury is understood to doubt the benefits of Lord Mandelson’s plan but is under pressure to approve it because the Government thinks it would be popular with motorists. The scheme could be introduced as soon as next month’s Budget.

Last month Angela Eagle, the Treasury Minister, told the Commons Environmental Audit Committee: “Not everybody can afford to buy a new car, even if they have a government grant for scrapping their old one. That is one of the difficulties.

“We are not ruling it out at all but we are still quite sceptical that it is a good use of taxpayers’ money.”

A note from the Treasury to the audit committee said: “Those who are able to purchase new cars after scrapping an old car may have planned to do so anyway. A scrappage scheme is likely to have a large deadweight cost.”

Analysis by the Department for Transport challenges the claim that a scrappage scheme would help the environment. The emissions savings from taking older, fuel-hungry cars off the roads early would largely be cancelled out by the environmental cost of manufacturing new cars.

The Treasury note said: “Initial analysis demonstrates that the costs outweigh the benefits even when the replacement vehicle has better-than-average fuel efficiency.”

Philip Gomm, of the RAC Foundation, said: “Research shows that the optimal trade-in age, from an environmental perspective, is about 18 years.

“We would not want to see any old vehicle being scrapped, irrespective of age, without fully assessing the carbon emission implications of building a new one. Nor is there any point in spending public money on such a scheme where individuals might scrap the vehicles of their own accord.”

The Society of Motor Manufacturers and Traders said that the scrappage scheme would help to protect 600,000 jobs involved in car retailing, servicing and the insurance industry.

Paul Everitt, the society’s chief executive, said: “The scrappage incentive scheme is a popular way for the Government to support the automotive industry and provides good value for money for the taxpayer.

“The increased VAT revenue to government largely offsets the cost of the scheme, yet the positive impact it could have on building consumer confidence and boosting the new vehicle market are extremely valuable to the UK automotive sector.”

Find a Part - Car Parts Search Specialists since 1978.

Car Parts Suppliers (Toyota, Nissan, Honda, Ford, Land Rover) shed jobs in UK

Over 200 jobs are to be lost at a car parts factory in the Black Country.

International electronics company Omron said it will close its UK base in Kingswinford, near Stourbridge, next year.  The Japanese-owned firm supplies high-tech electronics to many manufacturers, including Honda, Toyota and Nissan. Operations in the US, Canada and Europe will continue.  Up to 240 staff are facing redundancy. The firm is blaming a downturn in demand for new cars. 

This follows news that GKN had cut at least 2,800 staff worldwide since October, as the result of the slump in car sales, which has been blamed upon the lack of availability of loans from banks.  GKN supplies Land Rover and Ford among others, said it had cut 242 UK positions so far.  GKN said all its car part plants were now continuing to work shorter weeks due to the falling demand.

This report was compiled by Justin Woodcock on behalf of Find a Part, Car Parts Search Specialists.

Car Parts Search Sites Launched - Find a Part USA & Canada

Car Parts, or more accurately, auto parts searchers in the USA and Canada now have another tool to find the parts that they need, as Find a Part have launched USA auto parts and Canadian auto parts sites.  Utilising the network of contacts that Find a Part chairman Terry Gray has created in the states and canada over the last 30 years (Terry was the only non-US membership chairman for the Automotive Recyclers Association a couple of years ago), the aim is to provide a parts service that guarantees quality recycled auto parts for the American and Canadian public.  The guarantee of quality will come from the strict criteria for suppliers - only state association or Automotive Recyclers Association members will be allowed to join the service.