GENERAL Motors posted a third-quarter profit that fell 15 per cent after a loss in Europe, and disappointed investors with a forecast that closed the door on any improvement in the current quarter.
GM vowed to slash costs to shore up margins in a sputtering economy but its fourth-quarter outlook disappointed investors and sent shares tumbling as much as 10 per cent yesterday.
Chief executive Dan Akerson said the top US automaker was not performing well enough, almost a year after a record initial public offering (IPO) that capped the automaker’s return from a US government bailout and bankruptcy.
“GM delivered a solid quarter ... but solid isn’t good enough, even in a tough global economy,” he said.
“We know that there’s more work left to be done,” Akerson added. “We need to do a better job in Europe and South America. The results there are not sustainable and not acceptable.”
Finance chief Dan Ammann said GM needed to eliminate “cost and complexity” from its operations, suggesting the kind of campaign Ford Motor has run under CEO Alan Mulally for nearly five years. The “One Ford” campaign has merged vehicle platforms and development efforts globally, cutting costs and letting Ford to rely on more common suppliers.
Ford, GM’s closest rival, last month posted third-quarter net earnings that were nearly as high as GM’s, on revenue that was 10 per cent lower than GM’s sales.
GM ended the third quarter with less than $3bn (£1.88bn) in long-term debt.
The company’s net income in the third quarter fell to $1.7bn, or $1.03 a share, compared with $2bn or $1.20 a share in the year-earlier period.
Revenue rose to $36.7bn from $34.1bn last year – in line with analysts’ expectations.
City A.M. Reporter