Gee, Ford, paying attention? Might want to give Peugeot-Citroen a call and speed things up. - Fix-It FoMoCo - General Information - Team Focus - Come On In And Enjoy The Company!
US sales fall prompts GM warning
Sales of gas-guzzling sports utility vehicles are falling
Tough competition and lower north American sales have prompted General Motors (GM) to issue a profit warning.
The group said it now expects to lose $1.50 per share (78 pence) in the first three months of the year, compared to previous forecasts of breaking even.
Earnings forecasts for the year were also slashed to $1-2 a sharefrom the $4-5 per share previously forecast.
In January, GM said net profits had sunk 37% to $630m in the last quarter of 2004, from $1bn a year earlier.
Shares in the group plunged 11% to $29.81 in early US trade, with its euro-denominated bonds weakening sharply as well.
The fall also prompted credit rating agency Standard & Poor's to downgrade its outlook for GM - which shunted the world's biggest carmaker closer to junk status.
A downgrade to junk level could significantly raise the company's borrowing costs.
"Clearly we have significant challenges in north America"
Rick Wagner, GM chief
Rising costs
Piling on the bad news, the car maker added it expected a negative cash flow of $2bn for the year - mainly due to a slump in its north American business - even before it pays out $2bn to resolve its dispute with Fiat.
The figure also does not include the cost of a broad restructuring drive at its European operations.
The company is cutting 12,000 jobs across the continent in an effort to boost profitability.
"Clearly we have significant challenges in North America," GM chairman and chief executive Rick Wagoner said.
"The rest of our automotive businesses ... are running in line, or ahead of, our expectations.
"But North America is our biggest business, and the key driver of automotive earnings and cash flow. So it's important we get this business right," he added.
Production cuts
Despite the launch of several new models over the past year, GM said it was cutting production plans by 70,000 vehicles in the US in the face of growing stockpiles.
Earlier this month the company said it would be cutting production in North America by 3%, after announcing sales had fallen 12.7% in February compared to a year earlier.
It had already reduced output by around 9% in the face of growing stockpiles.
US carmakers have been hit hard by an foreign invasion of the US market - last month the only US company to reveal an increase in sales was DaimlerChrysler.
Toyota, Nissan, Hyundai and even Suzuki have all been nibbling away at the market as Americans increasingly turn away from gas guzzling sports utility vehicles in favour of more efficient models
Ford and PSA Peugeot Citroën Announce Plans for Expansion of Diesel Engine Production
Ford Motor Company and PSA Peugeot Citroën are planning to expand production capacity for the 1.4, 1.6 and 2.0 litre high technology diesel engines from the ongoing cooperative agreement between the two companies. http://www.psa-peugeot-citroen.com/en/morning.php
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A man is not old until regrets take the place of dreams...John Barrymore
Chelly: The diesels referred to are the ones being used in the Focus in Europe. I posted because I'm wondering if Ford is watching GM lose market share and money.
I had a Peugeot diesel here 20 years ago. Worked flawlessley for years and I saw it on the road up north 10 years ago, still running.
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A man is not old until regrets take the place of dreams...John Barrymore
I'm over seas now and it's funny because Ford is looked at as a high priced high qulity car. The Focus is looked at like it was a BMW or something on that line. The Focus sells over here for 26,000 Euro. All the extra work I have done to mine makes people think I'm rich. LOL
That's what drives me nuts. Ford is capable of building a first rate vehicle.
They just don't bother to do it to the same level in North America. Ford has this belief that they can't sell a higher priced small car here. They should see the backorders that Benz has for a 30,000.00 Smart car here.
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A man is not old until regrets take the place of dreams...John Barrymore
