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Thursday, 10 January, 2002, 22:05 GMT
GM goes for growth
A General Motors vehicle and logo
General Motors, the world's largest car maker, has issued an upbeat trading forecast, saying its earnings will beat previous forecasts.

The company also said it would be attempting to grow its market share.

"We will pursue growth in (market) share, while at the same time attempting to maximize profits," said GM Vice Chairman Bob Lutz.

Earlier this week, GM said it was planning to cut about 5,000 jobs in the US through natural wastage and by offering early retirement to some of its salaried workers.

On Friday, GM's rival Ford is expected to announce four times as many job cuts.

'Challenging' year ahead

"Overall, 2002 will be a very challenging year for the industry," said GM's Chief Financial Officer John Devine said in a statement.

"At GM, we are determined to continue building momentum."

GM saw its market share in the US rise during 2001 for the first time in many years.

Along with the other main US car makers, GM went all out to maintain sales levels in the wake of the 11 September terror attacks.

The car maker saw sales rise to near record levels after offering zero-financing deals on most of its cars and trucks, and it has continued to offer generous deals to buyers.

Strong sales in North America have enabled GM to raise its forecast for fourth-quarter earnings from 50 cents a share to 60 cents - which was better than analysts' expectations.

It is now forecasting earnings of $3 a share for 2002, against analyst forecast of about $1.93.

Peso devaluation hits earnings

GM said its fourth-quarter earnings' forecast would have been even higher but for Argentina's decision to devalue the peso. GM has one assembly plant in the country.

"Improved profits generated by strong North American vehicle sales will be partially offset by the unfavourable effect of the currency devaluation in Argentina," said Mr Devine.

The devaluation is expected to cost GM about 10 cents a share.

Despite the generally upbeat message from GM, on Wall Street its shares closed down 17 cents at $50.07.

See also:

08 Jan 02 | Business
GM cuts 5,000 more jobs
07 Jan 02 | Business
Car giant's image makeover
15 Aug 01 | Business
GM plans European revival
05 Jan 01 | Business
General Motors cuts US output
12 Dec 00 | Business
GM to axe jobs worldwide
09 Apr 01 | Business
General Motors gloomy on Europe
07 Feb 01 | Business
Daimler slumps, Ford and GM warned
05 Jan 01 | Business
Bleak outlook for US carmakers
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