Tuesday January 17, 2006

GM stays under pressure from all sides

news.yahoo.com :

As Asian car makers tighten their grip on future growth in world production, limping giant General Motors came under a withering attack from an activist investor who said Detroit's traditional ways of doing things needed to change. GM lost nearly $4 billion in the first three quarters of 2005 and will slash 30,000 jobs and close 12 plants in North America. Rival Ford Motor Co is expected on January 23 to announce its own round of plant closing and job losses. Both of have had their credit ratings slashed to junk.

Corporate turnaround specialist Jerome York said the whole U.S. industry needed to look at the stakes and work together. "When a company is in deep trouble - and make no mistake, GM is at the present time ... the time has come to go into crisis mode.", York said. York's criticisms echoed many analysts in the last year. But his voice has the financial muscle of his boss, financier Kirk Kerkorian, whose Tracinda Corp holds almost 8% of GM stock and is the single largest individual shareholder.

The call to arms and crisis mode at General Motors compared to the sunny outlook at Japanese giant Toyota Motor Corp. Most analysts expect Toyota to pass GM as the world's top maker of cars and trucks in a year or two, powered by a reputation for quality and fuel efficiency as seen in models like the pioneering Prius gas-electric hybrid.

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(2006-01-17 00:22:50 SGT) [Biz] Permalink

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