European auto woes latest hit to U.S. suppliers

DETROIT (Reuters) – An abrupt downturn in European auto demand represents the latest hit to U.S. auto suppliers, already struggling with the fallout from a U.S. auto market that has plunged to 15-year lows and could drop further.

In the span of a week, TRW Automotive Holdings Corp (TRW.N: Quote, Profile, Research), Johnson Controls Inc (JCI.N: Quote, Profile, Research) and Lear Corp (LEA.N: Quote, Profile, Research) cut their financial outlooks, blaming the credit turmoil for a downturn in European auto sales over the past month.

The possibility of a merger between General Motors Corp (GM.N: Quote, Profile, Research) and Chrysler LLC further complicates the picture for suppliers, given uncertainty regarding what models and brands a combined automaker might choose to build.

Sources familiar with the situation have said Chrysler has held talks with GM and other automakers including Renault (RENA.PA: Quote, Profile, Research) about a sale of all or part of its assets.

Europe had provided a silver lining for many leading U.S. auto suppliers such as TRW, which supplies auto safety products including airbags and electronic stability controls.

Reuters UK