Detroit's Big Three Save Cash

07/23/96

General Motors, Ford, and Chrysler have been building up their financial reserves and had put away $35.7 billion in cash and marketable securities by the end of the second quarter. Industry analysts are touting the large reserves as a good thing for shareholders, as it gives the carmakers the chance to live up to their promises to put more money into dividend hikes and stock buybacks.

In addition to investors, the workers who made that money for the automakers will be looking for a piece of it during triennial bargaining talks this year. UAW President Stephen Yokich mentioned GM's improved financial health -- and labor's role in that recovery when contract talks opened last month.

At $35.7 billion, the automakers' cash reserves are up 29% over what they were at the end of the first quarter, and 21% over what they were a year earlier.

In spite of a strike in March, GM's cash reserves at the end of the second quarter were up to $13 billion, significantly higher than the $8.6 billion the company had in the bank a year ago. Ford's cash reserves rang in at an all time high of $15.2 billion, up from $12.9 billion in the first period and $14 billion a year ago. Chrysler has met the year end cash goal it set for 1996 6 months early, with $7.5 billion in the bank. By way of settling the dispute the company had with Kirk Kerkorian, Chrysler has pledged to return anything above that level to share holders.

Paul Dever -- The Auto Channel