US auto giants get boost from overseas sales
Thursday, August 2, 2007
AFTER a long string of losses and setbacks, US automakers are showing new signs of life thanks to strong overseas earnings and cost-cutting at home.
General Motors Corp and Ford Motor Company posted surprisingly solid second-quarter profits as their massive restructuring programmes began to pay dividends.
GM on Tuesday reported that its quarterly results had improved by more than US$4.2 billion to an US$891 million gain.
It was the third quarter in a row in which GM had posted a profit. The automaker even managed to squeeze a modest profit out of its struggling North American unit.
Ford which lost US$12.4 billion last year posted a US$750 million gain last week, an improvement of more than US$1 billion on the second quarter of last year.
Chrysler, which has recently been sold to private equity group Cerberus after shareholders in Germany protested its uneven performance, will not report its quarterly earnings until the end of the month.
Chrysler was not in as dire straits as GM and Ford as it had already undertaken a series of major restructuring plans over the past three decades.
But executives at all three companies have said they don't expect to break even this year, with Ford not expecting an annual profit until 2009.
Despite the improvements this quarter, the Big Three are still struggling to reverse a steady loss of market share to Asian competitors in the critical US market.
"GM and Ford are good companies outside the US," said Alan Baum, an analyst with The Planning Edge. Baum noted most of the improvement in earnings is being driven by Ford's strength in Europe and GM's growth in Asia.
"They're still facing pressure in North America because of their inherent product weakness." AFP
General Motors Corp and Ford Motor Company posted surprisingly solid second-quarter profits as their massive restructuring programmes began to pay dividends.
GM on Tuesday reported that its quarterly results had improved by more than US$4.2 billion to an US$891 million gain.
It was the third quarter in a row in which GM had posted a profit. The automaker even managed to squeeze a modest profit out of its struggling North American unit.
Ford which lost US$12.4 billion last year posted a US$750 million gain last week, an improvement of more than US$1 billion on the second quarter of last year.
Chrysler, which has recently been sold to private equity group Cerberus after shareholders in Germany protested its uneven performance, will not report its quarterly earnings until the end of the month.
Chrysler was not in as dire straits as GM and Ford as it had already undertaken a series of major restructuring plans over the past three decades.
But executives at all three companies have said they don't expect to break even this year, with Ford not expecting an annual profit until 2009.
Despite the improvements this quarter, the Big Three are still struggling to reverse a steady loss of market share to Asian competitors in the critical US market.
"GM and Ford are good companies outside the US," said Alan Baum, an analyst with The Planning Edge. Baum noted most of the improvement in earnings is being driven by Ford's strength in Europe and GM's growth in Asia.
"They're still facing pressure in North America because of their inherent product weakness." AFP
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