GM makes a profit for 3rd quarter in a row
Published: Wednesday, August 1, 2007 at 8:34 p.m.
Last Modified: Wednesday, August 1, 2007 at 12:00 a.m.
DETROIT - General Motors Corp. ran its string of profitable quarters to three on Tuesday when it announced second-quarter net income of $891 million that came largely from overseas operations.
The earnings growth in Europe, Latin America, Asia and other areas eclipsed lingering problems in North America. Although GM showed vast improvement in its backyard, it still posted a net loss of $39 million there.
Nonetheless, quarterly profits announced by GM and Ford raised hopes that at least two of the Detroit Three were headed in the right direction after billion-dollar losses and talk of possible bankruptcies.
"I think it's brightening up,'' David Healy, an analyst with Burnham Securities, said of the clouds that had been hanging over Detroit.
"Both companies have shrunk about one-third of their hourly work force and they've closed a lot of plants.
"They're basically adjusting to the level of business that they're doing now.''
Ford Motor Co. last week posted its first quarterly profit in two years at $750 million, although the company warned it had not turned the corner to consistent profitability.
Chrysler Group's second-quarter earnings results have been delayed until August by the pending sale of 80.1 percent of the company to Cerberus Capital Management LP.
The second-quarter profits may be bad timing, coming on the heels of the formal start to contract talks with the United Auto Workers, although analysts say the companies can still point to losses in North America to show the need for concessions.
The net loss in North America was a major improvement over the second quarter of last year, when GM lost $3.95 billion.
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