US auto slowdown to hit Indian IT companies

[OhioChick]

8 Dec 2008, 0022 hrs IST

MUMBAI: The slowdown in the US automobile industry is likely to impact the growth of select Indian IT companies. Some Indian companies such as
Satyam Computer Services, TCS, Wipro and Infosys could be hit by delayed payments and a freeze in contracts as their major customers in the auto sector face threat of bankruptcy, according to analysts.

The top three US automakers — General Motors (GM), Ford Motor and Chrysler — are seeking a bailout from the US government. And, even if they succeed in getting the bailout, their IT expenditure could drop more than $1.5 billion a year, said analysts. Future contracts could come with demands for price cuts, which the IT majors will be pressurised to agree to.

“To cut costs, auto companies would shrink in size to trim their operations. Some of them will shut down a few plants. This means reduction in operational IT spends,” Gartner VP advisory service manufacturing group Thilo Koslowski told ET. The companies are also likely to axe expenditure on new IT initiatives often referred as discretionary spends.

Edelweiss Capital’s IT analyst Viju George said: “In case of a bailout, the US auto companies would cut their discretionary spend to stay afloat. As of now, about a third of their IT spends are of discretionary nature. This portion could get impacted going ahead.” Analysts say the magnitude of the impact would be known in next 2-3 months, once auto players have a re-look at their IT budgets.

http://economictimes.indiatimes.com/Infotech/US_auto_slowdown_to_hit_Indian_IT_cos/articleshow/3805973.cms

[Vincardog]

1. Cry me a river for the Indian IT industry that took away my job

I would not mind so much is their shit worked.

[stillcool]

2. and yet....

http://www.rediff.com/money/2008/dec/01gm-to-make-india-asia-pacific-hub-for-power-trains.htm
GM to make India Asia-Pacific hub for power-trains

December 01, 2008 14:42 IST

Unperturbed by the Mumbai terror attacks and its ongoing struggle to avoid bankruptcy back home, US auto major General Motors said on Monday it is making India power-trains development hub for Asia-Pacific region.

The company's Indian subsidiary General Motors India has already announced a total of $500 million investments in the country to set up new car and power-train manufacturing facilities and it will be hiring 500 people in the second-half of next year.
"With our engineering facility in Bangalore as the foundation of our business in India, we are making the country the development hub of power-trains for Asia-Pacific region," GMI president and managing director Karl Slym told PTI.

Considering the fact that the hub will cover countries like Australia, China, Korea, choosing India as the location is a significant decision, he added.

[comtec]

6. That is so fucking typical... I don't think we even have a word for it

sad they wont do that in the US :(

[BobRossi]

3. No more outsourcing, no more work visas.

Americans first God Damn it.

[OhioChick]

4. You Got It!

:thumbsup:

[Azlady]

5. You got that right!

Also, that was a big question on the Hill Friday to the big 3... which I think will play big with how much, if any they get.... the question was..... are you going to buy American and use American workers! I think Chrysler was the only one that said a strong yes!

If they want our taxpayer dollars, I want AMERICAN.... Not OVERSEAS parts and workers!

[blue97keet]

7. If any bailout money goes to TCS, Infosys etc. congress should be hung

[OhioChick]

8. Damn Straight. n/t

[Skittles]

9. f*** them