TPT July 2008

From the AmericaS

Cleveland, Ohio-based company said 5 May. Its investment in the 30 per cent-owned Amapa iron ore mine in Brazil cut income by $6.9 million, Cleveland Cliffs said. Increased spending on infrastructure projects in regions including the Middle East has caused a surge in prices for the raw materials of steel production. Cleveland-Cliffs said it expects to sell ore for $78 per ton this year in the US, 18 per cent more than in 2007. › President Hugo Chávez of Venezuela has signed a decree formalizing the nationalization of Venezuela’s largest steel maker Ternium Sidor, with the intention of transforming it into a socialist enterprise. Mr Chávez had complained that the Argentine-controlled company has not put a high enough priority on supplying the home market. On a 12 May visit to a Sidor plant, he told workers that his government plans to reduce Sidor’s exports and increase steel supplies for domestic consumption. Sidor was previously controlled by Luxembourg-based Ternium SA, whose main operations are in Mexico, Venezuela, and Argentina. The Venezuelan government was reported planning to compensate Ternium for the takeover before 30 June. Automotive Rising gasoline prices and falling truck sales nip Ford’s recovery in the bud Less than a month after reporting a surprise first-quarter profit, Ford Motor Co on 22 May said that it would drastically scale back

production and step up its cost-cutting efforts in response to a sharp drop in sales of pickups and sport utility vehicles (SUV’s). Ford executives also retreated from their pledge of delivering a full-year profit in fiscal 2009. Ford now forecasts industry-wide demand for cars and light trucks of only 14.7 million to 15.1 million vehicles – the lowest point in more than a decade. The revision downward reflects the toll that high gasoline prices and weak economic conditions have taken on auto sales in the US. The slide in pickup sales – tied closely to housing starts and construction activity – is particularly jarring for Ford and its domestic rivals General Motors and Chrysler, which all rely on that sector for much of their profits. In 2007, pickups accounted for about 14 per cent of the overall US market; they now represent 9 per cent. Ford will cut its overall North American production by 15 per cent in the current quarter from year-ago levels, as well as by 15 to 20 per cent in the third quarter and 2 to 8 per cent in the fourth quarter. In light of this forced retrenchment, Ford’s beating Wall Street expectations with a first-quarter profit of $100 million rings hollow. But it was a creditable performance, as surging sales in South America and Europe helped offset a loss in the company’s core North American division. Analysts attributed the results, which marked the Ford’s first profitable quarter since the second quarter of last year, at least partly to the restructuring. First-quarter revenue was $39 billion, Ford said, down from $43 billion in the corresponding period a year earlier. But ongoing cost-

94 ›

J uly 2008

www.read-tpt.com