Dejection in Detroit, Happiness at Honda: Q3 Results

27 October 2006

DETROIT: Turnround at General Motors and Chrysler Group is not just around the corner, according to the latest Q3 numbers from two of America's Big Three automakers.

GM's net loss of $115 million (€91.33m; £61.26m) - although narrower than the year-earlier period when it hemorrhaged $1.66 billion - is being hyped by the company's beleaguered chairman/ceo Rick Wagoner as evidence of "significant progress."

However, such "progress" is unlikely to impress the company's largest single shareholder Kirk Kerkorian who continues to urge an alliance between GM, Renault of France and Nissan.

There was scant cheer also at DaimlerChrysler's US unit Chrysler Group, which suffered a €1.16bn ($1.46bn; £778.0m) operating loss. It has formed seven teams comprising executives from Chrysler and other areas of the German parent group to review "all aspects of the value chain" within the company.

However, a sale of the US operation is not on the cards. In a statement issued late Wednesday, DaimlerChrysler confirmed that this is not an option under review. It also said it expects 2006 operating profit across the group as a whole to be "in the magnitude of €5 billion.

Meantime, at Honda North America, whose legendarily efficient manufacturing operations are non-unionized, vehicle sales rose 4.3% to 411,000 units producing an operating income of $812m on which it netted $54.4m, a margin of 6.7%.

Data sourced from Wall Street Journal Online; additional content by WARC staff