  Upinottawa Member Username: Upinottawa Post Number: 462 Registered: 09-2005 Posted From: 198.103.184.76 |
GM pulling a Mark Twain? Rumours of its death.... General Motors impresses investors Associated Press DETROIT — General Motors Corp. said Wednesday it lost $3.2-billion (U.S.) in the second quarter as it absorbed heavy charges for its massive restructuring program. But the world's largest auto maker reported an adjusted profit without the charges that handily beat Wall Street estimates and its sales surged 12 per cent. Investors sent GM shares up more than 6 per cent in morning trading. The loss of $5.62 per share in the April-June period compared with a loss of $987-million, or $1.75 per share, for the same period last year. Without the one-time charges, GM said it earned $1.2-billion, or $2.03 per share. That was significantly ahead of the 55 cents per share forecast by analysts polled by Thomson Financial. Revenue climbed to $54.4-billion, compared with $48.5-billion in the second quarter of 2005. ”We're particularly pleased with the speed with which our people have implemented our turnaround plan. Conventional wisdom is that you can't turn a ship as big as GM around quickly. We aim to prove that conventional wisdom wrong,” GM Chairman and Chief Executive Rick Wagoner said in a statement. Wagoner said the company had increased its target for reducing annual costs in North America to $9-billion from $8-billion by the end of 2006. ”Our turnaround has not just gained traction, it's accelerating into high gear,” he said. ”While significant work still remains, our ability to identify and initiate $9-billion in cost cuts over the course of the past year is unprecedented in this industry.” The second-quarter loss included a total of $4.3-billion in special charges, including a $3.7-billion after-tax charge related to buyouts and early retirements, which allowed GM to reduce its hourly work force by 34,400. One-time items also included a loss related to the pending sale of a 51 per cent stake in finance arm GMAC, a gain on the disposition of Isuzu stock and other restructuring charges. In North America, excluding special items, GM lost $85-million, a $1.1-billion improvement over the second quarter of 2005. Mr. Wagoner acknowledged in his statement that beyond cutting costs, GM must do better at selling vehicles in North America. He said the company's newer products, including full-size SUVs, the Chevrolet Impala and HHR, and the Pontiac G6, were doing well. ”We know we have to develop and build great cars and trucks to grow our business and we're encouraged by the recent success of our newest vehicles, particularly in the U.S. market,” Mr. Wagoner said. ”Our newly launched vehicles will account for about 30 per cent of our U.S. retail sales this year and grow to 40 per cent next year.” Its shares rose $2.04, or 6.7 per cent, to $32.70 in morning trading on the New York Stock Exchange. They have traded in a 52-week range of $18.33 to $37.57. Chief Financial Officer Frederick ”Fritz” Henderson characterized the quarter as one of ”good, solid progress,” driven largely by cost savings, though GM is expecting most of its cost reductions to take effect in the second half of the year. He told reporters at GM's Detroit headquarters that the company needs to ”keep making progress on the revenue side to get the business turned around.” Henderson said that per-vehicle revenue increased in North America even though volume was flat. That increase was driven by a greater share of high-margin sport-utility vehicles in the product mix, he said. ”The Yukon, Yukon Denali, Escalade, Tahoe, Suburban, Avalanche — we love them,” Henderson said. ”So do customers, that's even more important.” GM, which lost $10.6-billion last year, launched a major restructuring in November that called for closing 12 plants by 2008, slashing its work force and cutting structural costs by $4-billion this year. GM is currently in talks with Nissan Motor Co. of Japan and Renault SA of France about the possibility of joining their global alliance. Mr. Wagoner has said that while he believes it makes sense to examine whether there are potential benefits from a linkup, he does not want to get distracted from the turnaround plan. The proposal to join the alliance came from billionaire investor Kirk Kerkorian, who holds a 9.9 per cent stake in GM. It has fuelled speculation that Kerkorian is dissatisfied with the pace of the turnaround under Mr. Wagoner and wants to carve out a role for Nissan and Renault CEO Carlos Ghosn, a legendary turnaround specialist in the industry. Analysts had said strong second-quarter results would bolster Wagoner's position. Mr. Henderson said he said the quarter's success would have no impact on the talks. http://www.theglobeandmail.com /servlet/story/RTGAM.20060726. wgm0726/BNStory/Business/home | ||
Mikeg Member Username: Mikeg Post Number: 162 Registered: 12-2005 Posted From: 69.136.155.244 |
Yes, GM impressed investors with their 2Q06 results by beating the Wall Street analyst's projections. However, in the eyes of those Wall Street analysts, you are only as good as your last quarter. GM's long term health and survival depends on two things: - having products that customers want to own - negotiating a national contract with the UAW in 2007 that includes health care cost sharing and eliminates the so-called "jobs bank" | ||
Wazootyman Member Username: Wazootyman Post Number: 83 Registered: 02-2006 Posted From: 71.65.17.58 |
Well, I'm seriously considering buying a Saturn Vue, and I've never even looked at a Saturn before. My friend is on the waiting list for a Saturn Sky, and previously had claimed he would never own a post-1980's vehicle. He is very much into the 70's and 80's Ford/GM vehicles, but until recently has hated everything new. So, they are definitely doing something right. |
