GM signs of life...

Can losing over one hundred million dollars in three months ever be considered a good thing? Maybe, just maybe - if we're talking about a US auto manufacturer.

The Houston Chronicle reports this morning - GM posts $115 million loss for third quarter.

Sure, $115 million is a lot of money to lose - but in compared to a year ago...or the $5.8 billion loss that Ford just announced...it actually looks pretty good.

GM's July-September loss of 20 cents per share was far better than the same period last year when the nation's largest automaker lost $1.7 billion, or $2.94 per share.

The company said that excluding goodwill impairment at its finance arm and charges associated with the reorganization at Delphi Corp., its former parts division, it made a profit of 93 cents per share.

It looks as if operations actually turned a profit. This could be a good sign for an ailing giant.


Not such good news at Chysler, a former US auto major, and not component of DaimlerChrysler. Altough the parent company posted a profit, the Chrysler division lost a boatload - Chrysler Announces $1.5 Billion Loss.

Executives at DaimlerChrysler said today that they were working on a plan to return Chrysler to profitability after a loss of nearly $1.5 billion in the third quarter.

But they would not rule out the possibility that Chrysler could be spun off or sold, breaking up the eight-year alliance between the German and American auto companies.
...
Chrysler blamed its loss, signaled a few weeks ago, on slumping sales of a product line that depends heavily on sport utility vehicles and pickup trucks, and on the deeper discounts it has been obliged to offer consumers.

Last week, Chrysler said that it was striving to cut its manufacturing and marketing costs by $1,000 a car, under a plan called Project Refocus, the second extensive restructuring effort at the company in six years.
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Until today, Mr. Zetsche [CEO of DaimlerChrysler] and other executives always insisted that Chrysler had a safe place in the DaimlerChrysler fold. But when the parent company’s chief financial officer, Bodo Uebber,was asked repeatedly today about Chrysler’s prospects during a conference call with analysts and journalists, he gave cryptic, noncommittal answers.

But over at Ford, it also looks as if asset divesture is in the works - Ford’s Dismal Results Renew Speculation on Asset Sales.

“Ford can do two things: borrow more money and sell assets” to buy time until their operations problems are fixed, John Casesa, a longtime auto industry analyst, told The New York Times.

Ford already has put a British maker of luxury cars, Aston Martin, up for sale. The chief financial officer, Don Leclair, said Ford is preparing a short list of bidders, but does not expect to close a sale before the end of the year. ...

Mr. Mulally confirmed that Ford is open to reviewing its other luxury brands — leaving the door open to a potential sale of Jaguar, Volvo or Land Rover. “I really think it’s going to hinge on how the businesses are doing and can we make profitable growth businesses out of them with the action we have taken and additional actions that might be required,” he said in a conference call.

But as it is noted above - this is only buying time, it's not a long term plan. New CEO Alan Mulallay noted after the poor results released on Monday that Ford would not start seeing the results from their turnaround plan until the end of 2007.

Indeed, the new chief executive at Ford, Alan R. Mulally, a former Boeing executive, said the automaker would require a full transformation in the way it thought about consumers and approached the American market.

The typical Detroit turnaround, based on plant closings and introducing a few hit vehicles but with little change in attitude, will not be enough to see Ford through, Mr. Mulally said ...

Related prior posts:
Ford takes a beating...
Black October for US Auto...
More Shakeups in US Auto...
Toyota chief fears GM, Ford demise...
GM pushing Union on Healthcare cuts...
The China Syndrome...