Dura CEO sees no quick rebound in auto sales

Dura Automotive Systems Inc. President and CEO Tim Leuliette talks during the Reuters Autos Summit in Detroit, Michigan November 3, 2009.

DETROIT (Reuters) - The U.S. economy is set for a double-dip recession that will keep unemployment high and could pressure auto sales into the middle of the next decade, the head of Dura Automotive Systems said on Tuesday.

"We're planning on a double-dip for a couple reasons," said Tim Leuliette, chief executive of the privately held auto parts maker.

Current forecasts for moderate economic recovery do not give employers across many sectors of the economy any reason to start adding jobs, Leuliette told the Reuters Autos Summit in Detroit.

"A 2 to 3 percent-type of growth for our business is really a zero employment growth environment," Leuliette said. "We see further headcount declines, employment declines. And so at some point even those that are forecasting some growth, I think, we are going to see start to dissipate."

That sets the stage for U.S. sales of cars and light trucks to remain in the range of 9 million to 10.5 million for the next several years, he said. That forecast is well below the peak near 17 million hit in 2005, and allows for further declines from the 10 million to 10.5 million autos Americans are expected to buy this year.

"Will we make 10 million vehicles forever? No," Leuliette said. "Will we start to see 12, 13 or 14 million vehicles in an investment-cycle horizon? The answer is yes. Can't tell you if it's 2013, can't tell you if it's 2014, can't tell you if it's 2015."

But after a year of aggressive cost cutting by the big car makers and their suppliers, a prolonged period of low sales need not be traumatic for Detroit, he said.

"For the auto supply industry, really that's better than it sounds. Because if you go back to the first quarter and second quarter of the year when we were depleting inventories, the production base was not 9 to 10 million. We were running rates in January of 4 million, first quarter around 6 million to 8 million," he said. "Just building that run rate will be better for the supply base than '09 was."

Echoing the opinion of several summit guests, Leuliette said he did not think No. 1 U.S. automaker General Motors Co GM.UL would be ready for an initial public offering by next year.

U.S. taxpayers own 60 percent of GM after the Treasury Department pumped about $50 billion into its restructuring, and analysts have suggested an IPO would be the best way for Washington to recoup its investment.

"They need to say, 'Look, if General Motors has two quarters of performance or of a report card, it will get value X, if it has four or five or six or eight quarters it's going to get value Y. What makes sense for the shareholder?'" Leuliette said. "I would presume that the taxpayer, which we all are, would want to optimize that investment and perhaps going quick is not as good as going right."

For its part, Rochester Hills, Michigan-based Dura -- which went private in January -- is in no rush to return to the public markets.

"We're looking at least a three if not five-year kind of horizon for when we would consider going public again," Leuliette said.

(Reporting by Scott Malone, editing by Matthew Lewis)