in 2020, the greatest impact of “Black Swan” on the global economy, than the Coronavirus pneumonia epidemic spread thIs around the world. As an important part of the global economy, the US epidemic situation Is getting grim.
As of the morning of March 26, New York time, the United States diagnosed with new cases of pneumonia crown reached a total of 69,000 cases, including deaths in 1042 cases.
According to reports, along with large-scale outbreak of the epidemic in the United States, has had at least nearly a third of Americans were asked to stay home. While Maryland and Massachusetts governor then ordered the closure of non-essential businesses. As of March 24, the United States Car companies General Motors, Ford, FCA has announced the closure of all factories in the United States; at the same time, including Volkswagen, BMW, Daimler, including many European Car firms have also announced the closure of areas in the United States factory.
a lot of downtime Car prices, cut led the US Auto industry to a standstill. And since the outbreak phrase from the “staggering” US President Trump continues to spread all kinds of remarks about the epidemic and economic development to the outside world. Recently, the BritIsh “Guardian” live News that 23 local time, Trump at a press conference held in the White House hinted that the US death toll could cause economic damage, possibly even more than the number of deaths due to infection of the new virus crown many. “People are very anxious and depressed when suicide (the event) would therefore appear; when bad economic situation, there Will be death (event), but surely the number of deaths due to the virus we are talking about the death of a lot more.” Special Trump said.
The epidemic caused economic losses to the United States, for the time being we can not conclude that the epidemic but the impact on the Automotive industry, Is more obvious.
epidemic or cause 2020 US Auto sales fell by 20%
As early as the beginning of March, research institutes MC Automotive Will expect US Auto sales in 2020 dropped by 30 million units to 16.5 million units, and predicted that it would be the US Auto industry since 2014, the lowest level. However, as the epidemic situation Is grim, andMore factories closed, well-known research firm JDPower recently predicted that about 25% -40% of the US Auto market fell in March sales up or appearance; at the same time, the agency has US Auto sales in 2020 expected from the year 1600 ten thousand down to 14 million.
Earlier, Morgan Stanley predicted, affected by the Coronavirus pneumonia epidemic, the US Auto market sales thIs year Will fall by 9%; however, data RBC Capital Markets in Canada shows that the epidemic of consumption who needs to produce a chain reaction could lead to the United States in 2020 US Auto sales fell 20%.
Of course, as Coronavirus pneumonia epidemic outbreaks overseas, US stocks also suffered an unprecedented impact. In mid-March, US stocks appeared within ten days of a record four blown down. Meanwhile, the Detroit Big Three’s share price also fell to a record low rare. Among them, Fiat Chrysler (FCA) share price was down 19% to $ 8.6 per share; common share price about 10% decline in the second fuse March 12 triggered US stocks since mid-March; while Ford shares also as low as $ 500, a drop of nearly 10%.
Car prices, the fight against SARS, “self-help”
side Is a shrinking market capitalization, the other side Is a large-scale lay off factory, which makes the US Auto industry suffered heavy losses, reaching levels rarely seen in hIstory. March 19, Trump in a conference call, said:. “We are very Automotive industry companies have requested the government to help, it’s not their fault, so we Will lend a helping hand.”
According to reports, the American Automobile manufacturers Association asked Congress leaders to develop a “manufacturing emergency aid” funding plan to keep the plant running, workers keep their jobs, and manufacturing companies to prevent bankruptcy.
At the same time, the government also plans to taxation and policies to help enterprIses reduce the burden on enterprIses to enable them to have plenty of cash flow.
the face of the epidemic, in addition to government give support, the major US Car firms are also actively fight the epidemic, and the AssociationHelp the government expand the “self-help” actions.
(Source: Automotive News Europe)
Native American Car companies General Motors, in the closed all of North America plant, it Is also through cooperation with Ventec Life Systems, provide production ventilator. March 22, US President Trump on Twitter, said GM, Ford and Tesla has approved the production of a ventilator.
A few days ago, General Motors announced that its medical equipment manufacturer Ventec Is accelerating the plan, code-named V cooperation projects, production in general Is located in a plant in Kokomo, Indiana ventilator, intends to produce 200,000 units.
Tesla CEO elon. Musk said Tesla Will provide approximately 1200 ventilator week. In addition to the ventilator, Tesla Will also produce other personal protective equipment such as masks.
As the second-largest US Auto maker, Ford had announced that it stands ready to assIst the government, including the production of other medical equipment including ventilators. FCA senior employee said in an email on March 22 in the coming weeks, the company Will produce masks factories in the United States, the monthly production capacity Will be over one million.
The current epidemic, the major US Car prices in response to the call in addition to actively converting medical protective material production, to jointly resIst outside epidemic; it Is probably the next most worried about Is their earnings and cash flow.
Detroit Big Three “trouble”
A few days ago, Ford announced to counter the sudden outbreak of the epidemic, the company Will enable two pen unused credit lines, including $ 13.4 billion and $ 2 billion in credit Ford Motor credit company Ford Motor company under the credit line. These additional cash Will be used to increase working capital due to the temporary crown a new outbreak of pneumonia caused, and retain financial flexibility Ford.
In addition to announced the launch of an additional $ 15.4 billion in cash, but in view of the currentEconomic environment, Ford decided to suspend dividend payments, in order to ensure adequate cash flow, and to provide more flexibility for business. According to reports, by the end of 2020, with $ 22 billion in cash and $ 35 billion of liquidity on Ford’s book.
If, starting additional cash support, Ford Is the face of “self-help” measures epidemic had to take, then, the decline in net profit, Is forced to face its current urgent problem. Ford’s 2020 financial results, last year, the company net profit of only $ 47 million, compared with $ 3.7 billion in 2019, a decrease of 99%. In 2020, in addition to earnings outside North America, Ford Europe, South America, Asia-Pacific, Middle East and Africa, there are different degrees of loss.
close to 100% drop in net profit, but also foreshadowed the changes Ford senior personnel. Earnings Issued three days later, Ford announced the appointment of Jim Farley as chief operating officer, reporting directly to President and CEO Han Kai special; while the incumbent president Han Ruilin Automotive business Will officially retire. At the same time, Ford announced accelerated pace of business restructuring.
In the Automobile industry to accelerate the process of moving to a new four modernizations, the Ford centuries, indeed to the critical period of transformation and change. In fact, as early as 2019, Ford in the implementation of business transformation, while committed to the global business restructuring, reshaping lineup. Earlier, Ford had announced that it would spend $ 11 billion as restructuring charges in 2020, Ford has bet for the restructuring of $ 3.7 billion, plans to invest 900 million thIs year to $ 1.4 billion.
Today, the epidemic superimposed industry changes, so that cash flow and profitability of Ford’s more strained. March 20, 2020, Ford announced the withdrawal of financial performance targets Issued February 4, and plans to announce results for the first quarter while providing updated business goals April 28.
In addition to Ford, the other Detroit giants General Motors, also in the dual challenges of the epidemic and the industrial revolution brought in.
March 4, GM’s head of Mary. Bora has just announced the investment of $ 20 billion in 2025, for electric vehicles and Automatic driving a CarAfter development, the US epidemic began to intensify, making GM was forced to close all plants in North America, and actively planning the production moved to breathing machines and other medical equipment.
change things Is always intense and urgent. As the epidemic sweeping the globe, and as the electric wave rolling forward.
In recent years, in order to improve profitability, but also to win plenty of cash flow, in order to put the field into the future, GM plans to take a front contraction on a global scale. Plant closures of areas with poor profitability, cut off part of the loss of business, the sale of Opel / Vauxhall company, a series of drastic weight-loss plan, making it more resources and energy on their core business and regional advantages. Of course, the attendant financial statements also improved significantly.
showed a profit in 2020, GM realized net profit of $ 6.7 billion, net cash flow from operating activities in the Automotive business was $ 7.4 billion.
behind considerable cash flow, GM investment in the future. Now, with the introduction of new third-generation electric vehicle platform, GM has taken a substantial step forward in the field of electrification. In thIs regard, K-SwIss Automobile Research Institute believes that “in the long run, the Detroit Big Three, GM Is more successful at thIs stage transition to the new four modernizations field of traditional Car companies, and its investment in electrification and dIstribution aspects of the Autopilot, Will seize the future market as its strong bargaining chip. “
However, thIs epidemic, but also makes the transition in general weight loss, once again facing huge challenges. March 24, 2020, GM announced the withdrawal of financial performance targets previously announced, while borrowing from an exIsting line of credit of $ 16 billion to double the cash reserves to deal with the pressure brought about by the epidemic.
as one of the Big Three, Chrysler’s Detroit, and now to show people the image of FCA Group. ThIs Italian-American Carmaker also suffered heavy losses in thIs outbreak. As mentioned before, several US stocks fuse triggered the stock fell, making the FCA’s shares fell as much as 19%; while in the year 2020, FCA’s shares fell 37%.
2020Financial results, FCA full-year net profit fell 19 percent to 2.7 billion euros (about US $ 3.1 billion). North America as an important market FCA, and FCA Is called the “cash cow.” In 2020, FCA profit margins as high as 9.1% in North America, these profits come from pickups and SUV. Among them, the Dodge Ram pickup ranked second in sales in the US pickup market.
2020, FCA has developed a pre-tax net profit of more than $ 7.7 billion target. Meanwhile, FCA merger with PSA Car prices in Europe thIs year Will also have substantial progress. But, now a large-scale outbreak, it Is possible to FCA financial year Is expected to bring heavy pressure, but only the black swan, or FCA Will help to Carry out more cooperation with PSA Is quick. Because the status quo difficult Auto market, Car prices are often able to speed up the “Newspaper group heating” speed.
The current point of view, only epidemic black swan to the global economy’s negative effects are highlighted. It also makes the global Automotive industry Is facing unprecedented pressure. In terms of the US Auto industry, although the government and Car companies are looking for ways to help themselves, but for consumers, the economic downturn, loss of revenue, there Is uncertainty health, people Will put off buying a new Car program. As KrIstin Dziczek, vice president of the United States Center for Automotive Research said: for a Car company can not be spared.
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