News from the opposite ends of the spectrum

[Ram]

Carmaker GM loses another $15.5bn General Motors has reported a net three-month loss of $15.5bn (£7.8bn) as North American sales fell by 20%. GM took a $3.3bn charge for buying out the contracts of 19,000 hourly workers who left at the end of June. It also wrote off $1.3bn because of reduced values of big, used cars, which cut the value of formerly leased cars owned by its financing unit, GMAC. Without one-off charges, GM lost $6.3bn compared with a net profit of $891m in the same period of 2007. It is the third biggest quarterly loss in the carmaker's history. GM shares fell 4.7% in early trading. More staff may go On 15 July, GM announced the latest stage of its restructuring plans, which include laying off thousands of workers, speeding up the closure of truck and sports utility vehicle (SUV) plants, selling assets and suspending its dividend. On Friday, the carmaker said it might offer another round of buyout and early retirement offers to its 74,000 workers in the US. About a quarter of its US hourly workforce took the offers in the last round, which ended on 1 July. The staff cuts are needed because GM is cutting production as a result of falling sales of vehicles, especially SUVs and trucks. GM is not the only company suffering from the state of the car market. Other firms suffering Earlier in the day, BMW warned that its profits for 2008 would be below forecasts and predicted a "difficult" 2009. Also on Friday, Nissan reported a 42.8% fall in its three month profits. Net profit fell to 52.80bn yen ($491m; £248m) between April and June, compared with 92.31bn in the same period of 2007. "In the face of the severe operating environment, Nissan remains resilient but cautious on the outlook for our industry," said chief executive Carlos Ghosn, who also runs Nissan's French partner Renault. Nissan said it was trying to limit the effects of the slowing US car market by raising prices, cutting jobs and reducing truck production. Toyota and Ford also unveiled their July US sales figures. Ford said its car sales under the Ford, Lincoln and Mercury marques were 8% higher than July 2007. Its Focus car was the star performer, with sales up 16% in July compared to a year earlier. However, sales of SUVs were 54% lower and trucks and vans were down 18%. Toyota also saw a large fall in sales of its larger vehicles in the US. It sold 32% fewer SUVs than in July 2007 and 33% fewer light trucks. Passenger car sales were also 8% down. http://news.bbc.co.uk/2/hi/business/7537283.stm -------------------- Toyota's profits beat forecasts The Japanese carmaker Toyota has seen quarterly profits drop less than forecast but remains cautious. Net profits fell 28% in the three months to June at 353.7bn yen ($3.2bn; £1.6bn), from a record 491.5bn yen in the same period of last year. The firm said the trading environment had taken a sharp turn for the worse, creating a "very tough" quarter. The weak US economy and the stronger yen, which makes Japanese goods more expensive overseas, have dented sales. Another factor making it harder for Toyota and other car firms is the rising price of raw materials. While US sales have slowed, Toyota has seen sales in countries such as Russia and China rise. Energy efficient Given the tough conditions, Toyota said: "It will be crucial for us to act quickly and flexibly to overcome this." The firm is maintaining its earnings outlook for the year to March 2009, predicting net profits of 1.25 trillion yen. As energy prices rise, customers are moving away from gas-guzzlers, helping boost sales of more energy-efficient models including Toyota's Prius hybrid. While its rival Honda Motor recently reported an unexpected rise in quarterly profits, it is predicting falling profits for the whole of the year. US carmakers seem to be struggling more than their Japanese rivals. General Motors recently reported a $15.5bn quarterly loss and Ford's three-month loss was $8.7bn. http://news.bbc.co.uk/2/hi/business/7546749.stm ------------------- When other carmakers are reeling under record quarterly losses, Toyota's profit has exceeded expecatations. Truly remarkable acheievement. GM is fighting back though. Its closing down many SUV plants and ramping up the production of smaller and more fuel effecient cars.

[Lurker]

When other carmakers are reeling under record quarterly losses, Toyota's profit has exceeded expecatations. Truly remarkable acheievement. GM is fighting back though. Its closing down many SUV plants and ramping up the production of smaller and more fuel effecient cars.

Quite late in the day. During oil crisis of 70s and 80s USA car companies had this problem first hand. As soon as it passed they went hammer and tongs at the SUV market, surrendering the sedan and small market to Toyotas, Hondas. The rationale was more money in SUV. What they absolutely did not worry about was a) What if oil price went up again? b) What about the goodwill in market? GM/Ford/Chrysler has the absolute trash goodwill in Automobile market today. Noone wants to buy their car. Even the Korean cars are often put ahead of American cars. Now these companies do a U turn and try to mend the mistakes. They have money and resources yes but are they already past the point of no return?