Ford and GM, the U.S.'s top two auto manufacturers are bracing themselves for the worst. They have been running economic modeling to determin the steps they would take given a medium or severe recession in the US and across global markets. General Motors has a stockpile of $18 billion in cash while Ford has $20 billion saved up.
GM is relying on deferring non-essential capital expenditures and a shift in production to lower cost vehicles as part of its plan to save costs in the event of a a strong downturn. Ford says is is evaluating its future moves.
Fears of a recession have plagued Wall St. most of 2019 while a trade war with China rages on. Higher costs of materials due to tariffs is adding to the pain of weak product demand in the U.S., China, and Europe. In Germany, Europe's biggest economy, growth shrank by 0.1 percent in Q2 2019 as trade conflicts and auto industry troubles weighed heavily on the economy. Both exports and lagging demand at home have put a strain on German automakers already looking to slash costs.
Today, a strong signal that a recession is looming appeared as the 10-year treasury yield dropped below the 2-year treasury yield while do Dow Jones Industrial Average sank over 450 points.
Related:
Honda Slowing Production, Cutting Shifts
Nissan Profit Plunges 99%; 12,500 Job Cuts Eminent
Ford Europe Laying Off Another 12,000
Daimler Books First Quarterly Loss in Ten Years
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