--Fiat CEO Sergio Marchionne says company will address its
"European challenge" in third-quarter results
--Carlos Ghosn, CEO of Renault and Nissan, says status quo in
the European auto sector is "unsustainable"
--"We are not planning on a quick recovery," says GM's chief
economist
The chief executives of Renault SA (RNO.FR) and Fiat SpA (FIATY,
F.MI) on Friday said European auto makers must take more, painful
restructuring measures soon as sales in the economically troubled
euro zone head into a long-term slump.
"Something needs to give," Fiat CEO Sergio Marchionne said
Friday in Detroit. "You cannot maintain the same operating
structure you had before." Mr. Marchionne said Fiat will address
the issue of "how we'll deal with the European challenge" when it
releases third-quarter results later this year. Fiat closed a
European factory in 2010.
Carlos Ghosn, chief executive of French auto maker Renault and
Japan's Nissan Motor Co. (NSANY, 7201.TO), said in an interview
with The Wall Street Journal in Tokyo Friday morning that the
status quo in the European auto sector is "unsustainable." He
predicted governments ultimately will allow companies to overhaul
themselves to survive.
"There's going to be more restructuring," Mr. Ghosn said.
"Everyone is going to do it following his own agenda. I don't think
it's possible for anyone to oppose this." Mr. Ghosn said the
response so far from government officials "has been very
realistic."
Three of Europe's most-ailing mass market auto makers, France's
PSA Peugeot Citroen SA (PEUGY, UG.FR), Ford Motor Co.'s (F) Ford of
Europe, and General Motors Co.'s (GM) Opel unit, are pushing ahead
with plans to cut at least 15,000 jobs at factories in France,
Belgium and Germany, respectively. Ford and GM haven't outlined
their plans formally, but people familiar with their operations say
the companies are likely to close one large European plant
each.
Renault on Thursday said it will cut temporarily a shift of
small-car production at a factory in Slovenia that employs about
2,000 workers. Renault, in which the French government maintains a
controlling stake, last closed a French factory in 1992 and hasn't
disclosed large-scale cuts to respond to the current market
slump.
The French government earlier this week issued a report
suggesting it won't block Peugeot's plans to cut as many as 8,000
manufacturing jobs. But French Industry Minister Arnaud Montebourg
said on French radio Thursday that the Peugeot plan was
"unacceptable" and called for a "narrowing of its scale," Dow Jones
Newswires reported.
The euro-zone economic crisis is undercutting consumer demand
for vehicles across Western Europe. European car sales are down
nearly 7% through the first half of 2012, according to the European
Automobile Manufacturers Association, a trade group. What is
driving European industry executives' decisions isn't so much the
short-term slump but a judgment that sales in the region will
decline and stay depressed for a long time.
"Anytime you have a sovereign debt crisis it's going to take a
long time to recover," GM chief economist Mustafa Mohatarem said
Friday. "We are not planning on a quick recovery."
On Friday, German auto maker Volkswagen AG (VLKAY, VOW.XE) said
its sales in Western Europe outside of Germany have fallen 5.8% for
the year through the end of August, although deliveries in Germany
are up 4.1%.
"We are monitoring the continued tense situation, particularly
in Western Europe, very closely," said Christian Klingler, board
member for sales at Volkswagen.
VW's aggressive moves to gain market share at the expense of
weaker European rivals have prompted cries of foul from Mr.
Marchionne. The Fiat CEO has called on the European Union "to try
to provide some stewardship in this process" rather than let the
German, French and Italian governments battle to protect their
respective national champions.
Friday, Mr. Marchionne appeared to give up on his effort for a
Europe-wide automotive rescue.
"Unfortunately, my call for a coordinated intervention has
fallen on deaf ears," he said. "Certainly, from my German
colleagues who do not see need for Europe to intervene. So we're
now left to our own."
--Jeff Bennett contributed to this article.
Write to Joseph B. White at joseph.white@wsj.com and Christina
Rogers at christina.rogers@wsj.com
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