Wednesday, February 25, 2009

No jobs left

THE Indian financial sector, a relatively new industry when it took off post-economic reforms, generated a substantial amount of wealth and employment within a short span of time. Layoff was unheard of in the industry. But in the past six months, the word became the most dreaded one. With international financial services companies either collapsing or facing massive losses in the United States and the United Kingdom, Indian companies are beginning to feel the heat. The first area that is being “corrected” in order to streamline their operations is human resource.

In Mumbai, India’s financial capital, the mood is sombre. Nobody is taking anything for granted.

“When businesses begin losing money or services become redundant and you need to cut costs, the first target is employment,” said Miten Mehta of Bellwether Capital, a private broking and investment firm. “Of course, it is unfortunate and there could be other methods of cutting costs but with salaries at such staggering levels, by right-sizing, as it is now called, you get an immediate relief on costs.”

Several private firms, including Indian companies Frontline spoke to, are of the opinion that layoffs are inevitable given the global crisis, but they are unwilling to divulge numbers or percentages of staff they could lay off.

Among the figures that are in the public domain, banking juggernaut Citibank has laid off 37 top-level executives in India. It plans to axe 50,000 jobs worldwide, including 1,000 in this country. A leading investment bank in India, DSP Merrill Lynch, has let go of 40 executives from its private banking division, causing much angst in the financial community. Financial services major Barclays plans to layoff 2,100 people in investment banking and money management across the world. It has a presence in India. So the axe may fall here too.

The only comment Citibank offered when contacted was that the attrition level was “natural”, and was in accordance with its annual average. With regard to hiring, it admitted that recruitment was not at the levels it was in the past three years.

“The next 18 months look bleak. We are seeing just the beginning, and there is more pain to come. With several businesses in the financial services sector struggling to stay afloat, there is a freeze on hiring and hundreds of jobs are becoming redundant,” said a spokesperson for an international investment bank. “For us, the worst part is letting go of ‘performers’. Initially it was laying off those who were in any case on the brink because of non-performance or were at lower levels. Now, with businesses such as investment banking not doing well, we have had to reduce the head count and terminate the employment of some very good people from the middle to senior levels,” she said.

According to an investment banker with a small Indian firm, investment banking, which includes areas such as mergers and acquisitions and raising capital, is down by almost 50 per cent. This is across the spectrum – from large-scale international companies to boutique firms. Private equity is another section that is struggling. There are few IPOs (initial public offering), and private placement of shares has dropped dramatically from 2007.

Furthermore, new companies are not entering the market and so there are few job opportunities. In fact, the global finance leader Goldman Sachs was to bring its asset management division to India in 2008. It spiked the plan. A banker who was offered the job of heading this division said he had declined the opportunity as his company had made him a better offer. “It’s a twist of fate because no one declines Goldman. Yet I did, and now at least I still have my job.”

According to a recent study by the Associated Chambers of Commerce and Industry of India, employment generation in the top six sectors, which include finance, fell from 35 per cent in the first quarter to 15.8 per cent in the second and 10.8 per cent in the third. In the financial sector, the share of job creation dropped from 7 per cent in the first quarter to 2 per cent in the third quarter. A headhunter who does placements in high corporate positions said his business had virtually come to a standstill. “There are very few openings and too many people are vying for these jobs. We got used to high pays and good jobs from the late 1990s. So it is difficult to face this discouraging situation.”

But finance is cyclical, and this industry is known to have bounced back, says Mita Khanna, a director in a placement firm. A positive outcome will be that pay scales would become more rational. Besides, this is not the only sector in the industry to be suffering. Everyone is going through a rough time. Miten Mehta says India is primarily hit because of the problems of Wall Street. For instance, Lehman Brothers filed for bankruptcy and was subsequently bought by Barclays in the U.S. and Nomura in Asia. There will be job losses when acquisitions take place. Bank of America bought Merrill Lynch and caused a shake-up, he says. The effect will trickle into India.

Moreover, India’s exposure to money from overseas was huge. It is largely owing to this that the financial sector saw such a spectacular boom. The Indian stock market became heavily dependent on international money.

Explaining the crisis, Manish Sharma, an independent investment banker, says the Indian financial sector has witnessed many storms since liberalisation. It saw the Harshad Mehta and Ketan Parekh stock market scams and escaped almost unscathed from the Asian financial crisis in the late 1990s. “We averted the currency crisis, which afflicted several of the Asian tigers [Thailand, South Korea and Indonesia] primarily through our step-by-step approach and because we had not [and still have not] removed all controls on our currency policy.”

KAMAL NARANG
AT BARCLAYS' 24X7 branch in New Delhi.

However, the current crisis is different and we cannot escape its impact. India is more dependent on the global economy now than ever before. Although our banks had a very small exposure to sub-prime loans, we have been affected by the sub-prime crisis. Global liquidity dried up and Western markets started shrinking. This resulted in much lower capital flows to India, which in turn have knocked off more than 50 percentage points of the stock market index in less than a year, he says.

Indian companies suffered a double whammy with the shrinking of export markets and access to capital. “The well-being of the financial services sector is directly linked to the stock markets and the health of domestic businesses. With both in some trouble, the short-term outlook for the sector is not very promising,” said Sharma.
Nowhere to go

Preeti Singh (name changed), a corporate lawyer with a financial firm, lost her job recently as the company was downsizing. Earning close to Rs.30 lakh annually, she suddenly found herself straddled with monthly financial commitments but no assurance of an income to pay them. Preeti Singh cannot talk to the media as she has “gag orders”.

She came from New York with her husband in early 2008 after they were both offered lucrative positions in corporate houses in Mumbai. The downturn in the U.S. had not yet escalated, and when it did, she was glad to have made the decision to come to India. The couple rented a flat in one of Mumbai’s most expensive areas and led a typical young professional corporate existence. Membership in clubs, holidays abroad and two cars. With her job gone and the market so gloomy, she has currently no idea when or where she is going to get work. Even her investments, which could be a fall-back option for a few months, are not doing well since the stock market is so low. Preeti Singh’s case is typical of the many that have been laid off. A postgraduate with a background of good education, she is a hapless victim of circumstances.

“There is a lot of talent like hers out there but no one is willing to take them,” said Sharma.

Obama to stop outsourcing, India Inc worried

President Barack Obama's latest stand on outsourcing is worrying India- with the US already in recession and the President's announcements against outsourcing, the US is in protectionist mode.

“We will restore a sense of fairness and balance to our tax codes by finally ending the tax rates for corporation that ships our jobs overseas,” says President United States, Barrack Obama.

A strong warning by President Obama that will discourage US companies from outsourcing jobs to cheaper countries like India. In his first Congressional address, President Obama says it's time for America to lead again.

“We don’t accept that future where the jobs and industry of tomorrow take root beyond our borders and I know you don’t even, its time for America to lead again,” adds Barack Obama.

The President's constant anti-outsourcing tirade is a worrisome for India Inc. The industry's worries are understandable especially since India gets more than 60 per cent, or $64 bn, outsourcing work from the US.

This is not the first protectionist move the US has made since Obama took charge. Recently, it introduced an H-1B hiring ban for companies receiving bailout money.

The ban is likely to hit India's techies hard. Of the 65,000 H1-B Visas issued annually by the US government, 21,667 are to Indian techies.

For the Indian IT Industry, already hit by the recession, President Barack Obama's stand on outsourcing could not have come at a worst time.

Sunday, February 22, 2009

HP announces company-wide pay cuts to avoid layoffs

HP has followed up its lackluster Q1 financial disclosure with an internal memo announcing pay cuts for all employees, according to WebGuild. CEO Mark Hurd authored the memo, explaining that the company had to compensate for poor performance in several areas due to the ongoing economic recession. HP's desktop sales were hit particularly hard, with a revenue decline of 25 percent compared to the last quarter, while notebook sales were down 13 percent.

The reduced pay will start from the top, with Hurd losing 20 percent and the Executive Council members facing a 15 percent cut. The remaining executives will see a pay reduction of 10 percent, while base pay for exempt employees will be cut by five percent and non-exempt employees will only see a 2.5 percent drop.

"To give you a little insight into my world, after we report our earnings, we engage in a dialogue with analysts and investors. They’re going to ask what we’re doing in light of the current environment to right-size these businesses," Hurd said. He further explained that he considers the company "fundamentally sound" and that a company-wide workforce reduction is not the best solution for the current situation.

The recession has affected a number of tech-industry giants. Intel recently announced plans to halt production at five facilities, potentially affecting 6,000 workers. AMD is set to cut 1,100 jobs, while also lowering the pay of remaining employees. Microsoft plans to reduce its workforce by 5,000 employees, while Motorola is expected to lay off 7,000 workers.

"Again, there are no guarantees. If the environment gets worse, if the downturn lasts longer than we’re assuming, if our performance declines, we’ll have to reassess," Hurd said. "But for now I believe this is the right thing for the strength of HP."

Boeing issues 1,100 layoff warnings

Boeing issued its second batch of 2009 layoff notices Friday, and for the first time the cuts hit the assembly mechanics and electrical-system installers who actually build the airplanes.

Last month, Boeing had said most of those laid off would be workers who are not directly involved in production.

Of the 1,100 notices given by Boeing, about 700 employees in the Puget Sound region received 60-day layoff notices, including 452 Machinists union members and 40 members of the engineering union. In addition, Boeing said it is not filling nearly 1,000 open positions and will let go several hundred contract employees, most of those in support roles.

Boeing sent layoff notices last month to 190 local Machinists, mostly workers who maintain the factory buildings.

Boeing said in January that it intends to keep building jets at current rates.

In light of that, the shift to cutting assembly workers "just doesn't make sense," said International Association of Machinists (IAM) District President Tom Wroblewski.

"The company tells us they want to build 480 airplanes this year," he said. "They aren't going to do it by cutting these jobs."

"We've got a 787 and 747-8 to build. We've told the company we'll do whatever it takes to roll those out. To get hit with this is just unbelievable."

Bill Dugovich, spokesman for the Society of Professional Engineering Employees in Aerospace (SPEEA), said the white-collar union has identified 153 contractors in the job categories of those SPEEA members in the Puget Sound region who got layoff notices.

"We monitor every one of these layoffs to ensure contractors go first," Dugovich said.

Boeing spokesman Tim Healy said the company, in principle, agrees "that you should get rid of contractors before you get rid of employees with the same skills."

And he said the layoffs aren't a form of retribution against the IAM for the two-month strike last fall.

"We need to put the strike behind us," Healy said. "It wouldn't make sense to eliminate people you need to get the job done."

But he said the company has evaluated the skills it needs in the assembly plants and believes it can still meet its commitments despite the cuts.

Boeing Chief Executive Jim McNerney said in January his goal is to cut 10,000 positions companywide this year through a combination of layoffs and attrition.

Of that total, 4,500 will come from the Commercial Airplanes unit, most of which is based here. The Puget Sound region can certainly expect to take more than half of the companywide Boeing cuts.

The next wave of layoff notices will be issued March 20.

The possibility that much worse could come by year-end was raised by the head of the International Air Transport Association (IATA), Giovanni Bisignani, in remarks to reporters Thursday in New York City.

Trade magazine Flight International reported Bisignani "predicting Airbus and Boeing will fail to deliver more than half of the aircraft they will produce in 2009."

He termed that alarming forecast "a guess," but cited the dire state of the airline industry, the lack of available financing, and also "conversations with several airline CEOs who have confessed that they do not think they will be able to take delivery of all the aircraft they are scheduled to take in 2009."

Both manufacturers have committed to delivering about 480 airplanes this year.

No other industry watcher has suggested that airline customers would be so strapped for funds that half the manufacturers' output could be left parked and unclaimed. The IAM's Wroblewski said such an outcome would be "devastating."

Boeing spokesman Jim Proulx said the manufacturer is working closely with its customers to deliver firm orders and that, at this time, financing sources are sufficient to cover the needs of customers for the year.

Restructuring for RBS; over 20K jobs to go

The Royal Bank of Scotland is all set to go for a dramatic rescue restructuring, wherein assets worth billions of pounds will be put up for sale and there will be more than 20,000 job cuts, media report says.

"The Royal Bank of Scotland (RBS) is to be split into a "good bank" and "bad bank" in a dramatic rescue restructuring in which assets worth several hundred billion pounds will be put up for sale," the Sunday Times said.

Besides, RBS chief executive Stephen Hester will cut costs by more than one billion pound a year, a move expected to lead to 20,000 job losses, more than half of which will be in Britain, the newspaper reported.

The group still employs more than 1,80,000 people around the world, including 1,00,000 in Britain. RBS has already cut more than 12,000 jobs in the past year.     

The report further said "the asset sell-off would be one of the biggest ever seen, and would lead to a substantial reduction of the banks one trillion pound balance sheet."

Meanwhile, Hester is expected to outline his cost cutting plan of over one billion pound this week as he unveils Britain's biggest-ever corporate loss of up to 28 billion pound.

This week's results are expected to confirm a loss of 7-8 billion pound and a further write-down of up to 20 billion pound on its acquisition of the Dutch bank ABN Amro.

Thursday, February 19, 2009

US jobless at 5 million amid recession

The United States on Thursday reported nearly five million people were collecting unemployment benefits, a record high amid the recession, while Britain sought to rally consensus in the battle against the global economic crisis.

Data showed continuing claims for US unemployment benefits rose by 170,000 to 4.987 million for the week ending February 7, another all-time high, the Labour Department said.

The rapid pace of layoffs in the world's largest economy, which has been in recession for more than a year, was evident in initial US jobless claims.

Although initial claims for government unemployment benefits were unchanged at 627,000 for the week ending February 14, the closely watched four-week moving average has now increased in each of the last four weeks, experts said.

Analysts said the continuing claims number spelled bad news for consumer spending, which drives nearly two-thirds of US economic activity.

"Continuing claims are at a record high. They underscore the difficulty in finding a new job at this juncture and make it apparent for many people why they should be saving more money if possible," said Patrick O'Hare of Briefing.com.

"The increased propensity to save bodes well for consumer balance sheets, but it will be a drain on GDP since increased savings means less spending by the consumer," he said.

In further grim data, the first two US regional manufacturing surveys for February point toward a sharp contraction in production, investment and employment, said Ryan Sweet of Moody's Economy.com.

"The surveys also heighten concerns the economy is headed for a deflationary trap," he said.

Deflation occurs when prices decline on a sustained basis, prompting consumers to delay purchases because they expect prices to fall further.

The reports on growing strains in the economy came a day after US President Barack Obama unveiled a 275-billion-dollar housing rescue plan aimed at staving off foreclosures at the heart of the global financial crisis that has morphed into a spreading world economic crisis.

On Tuesday Obama signed into law a 787-billion-dollar stimulus package, another major round in government economic stimulus efforts across the globe that have sparked protectionism charges.

Czech Finance Minister Miroslav Kalousek on Thursday denounced protectionism as "the road to hell" and launched a broadside at the US stimulus package.

"We have to prevent populists from going on with the Buy Czech, Buy American, Buy French campaigns," added Kalousek, whose country took over the EU presidency from France at the beginning of the year.

Both France and the United States have been criticised for their costly plans to help their struggling economies, which some observers described as protectionist.

British Prime Minister Gordon Brown on Thursday met in Rome with his Italian counterpart Silvio Berlusconi as their countries prepare for upcoming Group of 20 crisis meetings.

"We are going to see unprecedented global cooperation over the next few months," Brown said at a joint news conference with Berlusconi.

The G20 finance ministers and central bank governors are to meet on March 14 in Britain, this year's head of the group of developed and developing countries that includes Brazil, India, China and Russia.

The finance meeting will set the stage for a G20 leaders' summit on April 2 in London.

Brown said the summit would aim to strike "a global bargain ... where each continent will make its contribution to the recovery of the world economy.

He warned the new bargain "must include new arrangements for global financial regulation, but recognise that national supervisors are insufficient in a world where there are global capital flows."

Major credit-boosting moves by Japan, which faces its worst recession in decades, underscored the size of the challenges facing the world's leading economies.

The Japanese central bank announced plans to spend more than 10 billion dollars (7.9 billion euros) buying corporate bonds to tackle a credit crunch and painted a sombre picture of the world's second-largest economy.

Bleak corporate news continued to weigh in. The world's biggest reinsurer Swiss Re reported a 2008 loss of 864 million Swiss francs (735 million dollars, 585 million euros) and French banking giant BNP Paribas booked a fourth-quarter loss of 1.366 billion euros (1.7 billion dollars).

BNP Paribas attributed its results to "deterioration in the economic climate in the United States, Spain and Ukraine" as well as to the deepening global financial crisis.

Brazilian aircraft manufacturer Embraer said it would lay off 20 percent of its 21,000 workers because of the "unprecedented crisis hitting the world economy."

Federal-Mogul to lay off 600 workers at Bangalore plant

In what could turn out to be one of the largest retrenchments in the Indian auto sector, global auto parts major Federal-Mogul Corporation is undertaking a massive lay-off in one of its key plants in the country.

The $7-billion US-based company plans to retrench over one-third of its 1,900-odd employees in its Indian subsidiary, Federal-Mogul Goetze, at its Bangalore plant. Initially, it plans to lay off 500 workers in the factory, which is engaged in the manufacture of pistons, piston rings and pins. During the last few months, the company retrenched a few of its key managers in the factory and over 600 contract and casual workers. The Indian arm of the company makes critical parts for Tata Motors’ Nano car and other vehicle manufacturers.
Downturn effect

The spokesperson for Federal-Mogul Corporation, Ms Jennifer Rass, told Business Line that the lay-offs are due to the downturn in the automotive industry and reduction in customer orders. “As a result of the current economic climate and the downturn in the automotive industry, Federal-Mogul Corporation will be adjusting workforce schedules at its global operations to reflect the reduction in customer orders and the need to reduce costs. These schedule adjustments will impact employees in our Bangalore facility, as the company streamlines operations and adjusts to the industry outlook,” said Ms Rass.

An employees’ union spokesperson claimed that the workforce reduction will not be confined to just Bangalore; similar measures are being planned for the company’s other factories in the country. According to him, there are plans to reduce one-third of the workforce from each of these factories. The company, which has about 43,000 employees across 35 countries, has 1,900 employees in its Bangalore plant.
May cut production

Once the workforce is trimmed, the production is expected to come down by half, said company sources. They added that as per the notice filed with the local Labour Commissioner, Federal-Mogul Goetze also planned to cut down the working days by 15 days every month till December this year. It has also offered a voluntary retirement scheme to its employees, wherein Rs 2.5 lakh would be offered to workers who opt for this scheme. Besides, the workers have been asked to surrender their earned leave too.

Federal-Mogul Corporation owns over 74 per cent stake in the publicly listed Federal Mogul Goetze (India), while the rest of the stake is with the public. The company’s shares closed at Rs 34.60 on Tuesday, nearly 1 per cent lower than the previous closing price.

Monday, February 16, 2009

Sun Micro lays off 150 in India

The global layoffs by tech MNCs have started spilling to their Indian operations. IT giant Sun Microsystems reportedly laid off over 150 employees in India around late in January.

According to a news report in a leading daily, most of the laid off employees were software developers working in the company's Bangalore office.

The news report adds that the company may go for another round of lay offs in the last week of February. This round is likely to impact support staff from departments like marketing, human resources and sales.

In November last year, Sun Microsystems announced that it plans to cut as many as 6,000 jobs as the company tries to cope with plunging sales of server computers to financial firms, market-share losses to bigger competitors, and a spiraling stock price.

The reduction, which will eliminate as much as 18 per cent of the staff, will shave $700 million to $800 million from annual expenses, Sun said in an e-mailed statement.

Last week, a Goldman Sachs analyst put the server and software maker's stock on Goldman's `Americas Conviction Sell' list. Goldman analyst David C Bailey said in a client note that Sun's heavy concentration of financial services, telecom and manufacturing customers put it at a disadvantage to its more-diversified competitors. Bailey said that Goldman expects a low double-digit revenue drop at Sun in 2009 due to weakness in several of the company's key verticals and accelerating deterioration of its Unix server market.

Sharp to cut 1,500 jobs

Japan's Sharp Corp said that it would eliminate 1,500 domestic jobs as the

electronics maker predicted its first-ever operating loss
this year due to the recession.

"We have decided not to renew 1,500 contract workers in Japan," Tetsuo Onishi, the company's director for accounting, told a news conference.

"By doing so, we shall build a human resource structure that meets the size of sales," he said. Top managers will also accept pay cuts and forego bonuses, he said.

Saturday, February 14, 2009

Sapient sacks 500 workers, reducing budgets

Technology major Sapient Corporational is latest to join the list of companies going in for large scale lay offs.

In a surprise move it has sacked 500 of its employees in India. Infact no notices were issued to the employees and the company even deployed armed guards to prevent them from turning up for work. In a statement the company has notified the lay offs.

"Businesses worldwide are feeling the impact of the economic downturn and, as a result, are reducing budgets and delaying projects. In order to adjust to this changing demand environment, Sapient has exited about 8 per cent of its people,” the company says.

In fact this is the second time the company has sacked employees. 160 of them were removed just a few months ago.

The senior management of the company refused to comment on the issue. They only said that the sacked employees would get due severance packages and the company would try its best to get them out placements, but they had no choice but to take this drastic step

Thursday, February 12, 2009

Apollo Tyres to lay off 1,500 jobs

Apollo Tyres on Thursday said it is looking at laying off about 1,500 of its workforce.

"We are looking at about 15 per cent of contract and casual labours (for job cuts). We are not going to cut permanent jobs," Apollo Tyres CMD Onkar Singh Kanwar told reporters on the sidelines of the FICCI AGM.

The company has about 10,000 workforce and are looking to cut roughly 1,500 jobs, he said.

On the company's performance, Kanwar said in the current fiscal Apollo will be doing better than the industry average.

India to lose 15 lakh jobs by March: G K Pillai

Tuesday, February 10, 2009

Nissan to cut 20,000 global jobs

Nissan is to cut 20,000 jobs worldwide, 8.5% of its workforce, over the next year because of a sharp fall in sales.

The Japanese carmaker made the announcement as it said it expected to make a loss of 265bn yen ($2.9bn; £2bn) for its current financial year.

Nissan chief executive Carlos Ghosn said the the firm's "worst assumptions on the state of the global economy have been met or exceeded".

"The global auto industry is in turmoil. Nissan is no exception."

Sales slump

Nissan said the 20,000 job cuts would be made between March 2009 and March 2010.
Mr Ghosn has painted a bleak picture

The reduction will see the size of its global workforce fall to 215,000 from 235,000, although Nissan has yet to say which plants will be affected, and by how much.

It added that it would also be talking to unions about cutting working hours.

The company had already announced job cuts last month, including 1,200 at its UK plant in Sunderland.

Nissan also said on Monday that it sold 731,000 vehicles worldwide between October and December, down 18.6% from a year before.

This resulted in a net loss of 83.2bn yen, compared with a 132.2bn profit a year earlier.

Car industry analyst Mamoru Katou said the job losses would make Nissan unpopular in its home country.

"The job cuts will hurt Japanese parts-makers, too, and in the long run diminish the Nissan brand value in Japan," he said.

Nissan's loss for the current financial year will be its first since the 12 months ending March 2000.

Since then Mr Ghosn has managed to turn the firm around, thanks in part to forming an alliance with France's Renault.

Industry-wide malaise

Most of the world's other main carmakers have also seen sales and profits slump as a result of the global economic slowdown.

As a result, there is a growing trend of cutting production and jobs.

Since the start of the year, Honda has announced 3,100 redundancies, while General Motors is reducing its workforce by 2,000.

Other car firms, such as Toyota, Porsche, Honda and BMW, have announced reductions in output as fewer people buy new cars.

GM to Cut 10,000 Jobs Worldwide

Hard times for the auto industry are about to get worse for thousands of workers at the world's second biggest car company.
U.S.-based General Motors said Tuesday it will lay off 10,000 salaried workers. The automaker said the cuts will come from its operations around the world, with more than one-third affecting workers in the U.S.
Last week, GM reported January car sales in the U.S. plunged by 49 percent.
Still, GM's head of global sales, Jonathan Browning, said he expects production of vehicles at the company's U.S. facilities to start increasing. But he cautioned the increase would be the result of "balancing inventory" and not because of a jump in demand.
He also said GM will continue to focus on emerging markets like India and China.
GM's announcement comes on the same day data from China shows that country has overtaken the United States in auto sales - making China the world's biggest auto market for the first time.
The China Association of Automobile Manufacturers said Tuesday China sold some 735,000 vehicles in January, about 80,000 more than the United States during the same month.
Industry analysts said China may have surged ahead in January because of a record slump in U.S. car sales.
They also noted that while both countries have been hit by the global financial crisis, China typically sees a boom in sales in January because of its annual Lunar New Year holiday.
The Chinese government has also been taking steps to boost car sales. In January, the government announced plans to cut the sales tax on small cars in half until the end of 2009.
Last week, GM's executive director of global market and industry analysis said he expected auto sales in China could hit 10.7 million units this year, which is nearly a million more than his estimate for U.S. auto sales.