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Friday, May 23, 2008
American Axle Strike to Cost GM $1.8B in Profit
FOXBusiness
General Motors (GM), the world’s second-largest auto maker, said the American Axle strike affected 30 facilities and will result in a $1.8 billion pre-tax profit hit next quarter.
The car maker said it lost 230,000 vehicles in lost production, and expects only to make up a portion of that loss because of the downturn in the economy and “the market shift away from the types of vehicles that were impacted by the action at American Axle."
American Axle (AXL) produces products primarily for GM’s pickup trucks and sport utility vehicles.
GM shares fell more than 4% and hit a 26-year low Friday afternoon.
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If you've seen TV footage of an active trading pit, you've probably noticed the atmosphere is uproarious and wild. The reason for all the shouting? Open outcry.
On exchange floors that use the open-outcry system, traders shout prices they want to sell while others yell back the price they want to buy at. They also use hand gestures to communicate with each other.
This system has been used for a long time, but is being replaced with modern technology. Some argue electronic exchanges can do the job faster and more accurately. One of the few exchanges that continue to use open outcry is the New York Mercantile Exchange.
