GM Says Things Not So Bad

Detroit - What's going on? After months of belly aching and crying the economic blues, after announcing massive layoffs through the first four months of this year, after plant shutdowns, after squeezing suppliers for every fraction of a cent on parts and materials, General Motors yesterday announced that it expects to earn 95-cents a share in the second quarter of 2001, nearly double what it earned in the first quarter.

What appears to be going on is attention to the bottom line and managing production to meet demand. Obviously, GM's cost cutting measures along with careful inventory management have shown results. Revenue for the three-month period was $42.6 billion, down $300 million from last year. Earnings were $225 million, down 87% from last year. Analysts reacted favorably to the news since earnings were better than most expected.

The same thing happened at Ford Motors where first quarter profits fell 41% from the same period a year ago, but the figures were better than had been anticipated. Ford earned $1.13 billion on revenues of $42.4 billion in the quarter.

GM says it is sticking to earlier estimates that total North American sales this year will hit 16.5 million units.