GM strike dents Nemak revenue, shipments

The General Motors (GM) strike in September and October made a significant dent in Mexico-based aluminum diecaster Nemak's 2019 shipments and revenue.

Nemak shipped 44.3mn equivalent units of castings in 2019, down from 50mn units in 2018, causing revenue to drop by 15pc over the same period to $4bn. Fourth quarter shipments were off by 11pc from a the year-prior quarter at 10.2mn units, while revenue declined by 13pc to $941mn.

Shipments in North America fell by 13pc to 25.8mn units in 2019, mostly because of the month-and-a-half GM strike in the third and fourth quarters. North American revenue declined even more sharply than regional shipments, going down by 16pc to $2.2bn in 2019.

Nemak also flagged the phase-out of certain light-vehicle models by the big three Detroit-based automakers and reduced shipments to China.

European shipments fell by 5pc to 15.3mn units in 2019 while rest-of-world shipments were off by 21pc at 5mn units.

The company also cited lower metal prices as a global factor in lower profitability and revenue. The Argus assessment for the most common secondary aluminum casting alloy, A380.1, averaged 73.38¢/lb in 2019. In 2018, the alloy traded at an average of 95.56¢/lb.

A surplus of US scrap caused A380.1 to drop in mid-2018, to fall further in 2019, and it has been slowly recovering in price since the beginning of the year. Argus assessed A380.1 at 67-68¢/lb in the third week of February, up from 63-64¢/lb in the first week of January.

Nemak's full-year 2019 profit fell by 28pc to $130mn from 2018.

By John Betz