GM
General Motors is staging a slow but steady recovery, with increasingly
smaller losses at the world’s biggest carmaker beginning to show
that its recovery strategy is starting to take effect.
Third quarter losses posted by GM’s North American section was down
to $374 million, compared to $2.2 billion for the same period last year;
in Europe, it was down to $103 million from $353 million.
CE for the company, Rick Wagoner, said: “This improvement in North
America and Europe combined with the strong sales growth and earnings
performance we see in Asia and Latin America, confirm that our plan is
on track. We have more work to do, and we remain focused on continuing
progress in the quarters to come.”
With regards to GMs relationship with former subsidiary Delphi, for which
GM is liable for pension and healthcare benefits, GM has put an extra
$500 million into its contingent liability reserve, bringing the total
to $6 billion. It is expected that GMs exposure to Delphi will amount
to between $6-7.5 billion before tax.
Wagoner also said that GM was “encouraged” by progress with
Delphi, and is also looking at the proposed sale of a 51 per cent stake
in its financing section, GMAC, before the end of the year.
Ford
Meanwhile, Ford has posted third-quarter net losses of $5.8 billion,
up from $284 million this period last year. North America was responsible
for a pre-tax loss of $2 billion, compared with a loss of $1.2 billion
last year.
Ford Europe’s Q3 pre-tax loss was $13 million compared with $55
million in 2005, with Ford stating that “Ford Europe showed a year-over-year
improvement in operating results and remained poised to deliver full-year
profitability”.
Alan Mullaly, Ford president and CEO, said: “These business results
are clearly unacceptable. We are committed to dealing decisively with
the fundamental business reality that customer demand is shifting to smaller,
more efficient vehicles. Our focused priorities are to restructure aggressively
to operate profitably at lower volumes and to accelerate the development
of new, more efficient vehicles that customers really want.”
Chrysler
Like Ford, Chrysler also posted a third-quarter
loss of $1.5 billion dollars, compared with a profit of $393 million for
the same period last year.
Chrysler attributes this to falling sales and "an unfavourable shift in product and market mix." Higher fuel prices have pulled consumers away from its SUV- and Minivan-heavy product range. In a move to cut swollen inventories at dealerships, the company has reduced shipments and cut production accordingly. Total factory shipments of 504,400 vehicles this quarter is 158,900 fewer than last year.
New products are on the way, including the Chrysler Sebring, Dodge Nitro and the Jeep Patriot – all of which will use four cylinder engines from the new GEMA alliance engine plant in Michigan.
DaimlerChrysler issued the following statement regarding speculation on the potential sale of Chrysler Group: "DaimlerChrysler reaffirms its previous statements made to the media that there are no plans to sell Chrysler Group. During today's third-quarter earnings analyst/media conference call, the company appropriately chose not to add to the speculation regarding this topic. However, the resulting coverage and comments made it clear that this 'not for sale' statement needed to be reaffirmed."
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