BorgWarner: Auto Outlook Grim as Europe’s Woes Spread

BorgWarner Inc. is worried that business could be more difficult than expected for the auto industry in the current quarter because of Europe's widening slowdown, Bloomberg News reports.

CEO Tim Manganello tells the news service that the auto sales slump and production cuts have now spread "across the full landscape" in Europe, including such formerly steady markets as Germany.

The economic mood worldwide has gotten more conservative and nervous, according to Manganello. He says concern about the Congressional stalemate on raising the U.S. debt ceiling also has curtailed BorgWarner's capital spending.

When companies such as BorgWarner are sitting on cash, the caution "trickles down" to smaller suppliers, Manganello adds.

If conditions in Europe deteriorate, BorgWarner can trim its workforce there by dismissing temporary workers, who account for as many as one-quarter of its employees in the region, he notes. Manganello says the company can cut jobs in the U.S. if needed.