Auto parts maker Linamar says GM strike costing them up to $750,000 per day
Story by:@ freightWaves I
Canadian auto parts firm’s shares plunge by more than 10% after it warns of earnings hit from a slowdown in General Motors orders.
Canadian auto parts maker Linamar (TSX:LNR) warned that the General Motors (NYSE: GM) strike is hurting its earnings by as much as $750,000 per day.
Linamar’s stock fell by as much as 13% during trading on October 3 after the company made the disclosure in a mid-quarter update. The loss in business, of about US$750,000 per day, stems from a decline in GM orders, the company said.
Linamar did not disclose the potential total impact on third-quarter earnings, slated for release on November 6. But the earnings period covers 15 days of the GM strike.
Linamar’s earnings warning adds to the growing impact that the strike by nearly 50,000 United Automobile Workers at GM’s U.S. plants is having across the borders in Canada and Mexico.
GM shut down its assembly plant in Oshawa and temporarily laid-off workers because of a shortage of parts. Layoffs have also hit suppliers and other adjacent companies, including a Canadian branch of a U.S. trucking company Martin Transportation.
GM also shut down two factories in Mexico because of the strike.
Linamar operates 35 facilities in North America, with 24 in Canada, six in the United States and five in Mexico. It also has its own private trucking fleet, Linamar Transportation, with more than 100 trucks.
Linamar Transportation handles auto-parts freight for its parent company, including cross-border runs between Ontario and Michigan. The Guelph-based carrier offers other truckload services. According to the article in the freightwaves.com and its author
Read the full freightwaves.com story HERE
“Soon to enter its fourth week, the strike is rippling across the economy, from parts suppliers in Michigan and Canada to bars, restaurants and other businesses that serve employees who now find themselves tight on cash”.-According to the article in Bloomberg.com and its author David Welch
“Eighty-five tractor trailers full of hoods, bumpers and other assorted parts sat, unloaded, in Lansing, Michigan, last week — more evidence of the cost of the General Motors Co. strike that has shut down most of its North American plants and idled 46,000 workers”.- Also according to the Welch and his article in Bloomberg.com
Read the full bloomberg.com story HERE
Source and credits: freightwaves.com // David Welch @ bloomberg.com and iTrucker / Mario Pawlowski