World financial crisis

Auto crisis deepens, stocks slide

Article published on the 2008-11-19 Latest update 2008-11-19 15:43 TU

GM boss G Richard Wagoner (R) with auto union leader Ron Gettelfinger before the Senate hearing
(Photo: Reuters)

Stock markets around the world slid today as carmakers in Europe and the US pleaded for government help. As the US Labor Department announced the steepest fall in consumer prices since records began in 1947, China became the world's largest holder of US Treasury bonds.

Asian shares fell amid fears that the US's big three US carmakers may go under, with a knock-on effect around the world.

In Washington Tuesday, Senate Republicans expressed reluctance to spend public money on saving General Motors, Chrysler and Ford, after their bosses appealed to the Senate Banking, Housing and Urban Affairs Committee for help.

"What exposes us to failure now is the global financial crisis, which has severely restricted credit availability, and reduced industry sales to the lowest per-capita level since World War II," GM chairman Rick Wagoner said.

He claimed that the US economy would face a "catastrophic collapse" if the government does not help the industry.

But Senate Republicans demanded a "long-term path for viability" before handing over any cash, while Treasury Secretary Henry Paulson told the hearing that the US financial bailout is "not a panacea for all our economic difficulties".

In Japan Nissan boss Carlos Ghosn warned that the company will make "zero" profits in the second half of the current fiscal year. In France workers from Renault and supplier Faurecia demonstrated against a voluntary redundancy package in Sandouville, north of Paris.

German carmakers appealed for government help earlier this week.

In other industries, Singapore-based Neptune Orient Lines says that it will cut 1,000 jobs and Air New Zealand has announced 200 layoffs.

Wall Street slid on opening Wednesday, as the US Labor Department reported an one per cent fall in consumer prices in October, the biggest drop since the data were first published in 1947.

China is now officially the US government's biggest foreign creditor, overtaking Japan. The People's Republic now owns 585 billion dollars (460 billion euros) of US Treasury bonds.