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Detroit's Big Three Improve Outlooks

October 22, 2003

The Big Three U.S. automakers continued to use cost-cutting and their strong financing business in the third quarter to shore up weak earnings in automotive operations. But all three, including General Motors Corp., Ford Motor Co. and Chrysler Group, a unit of DaimlerChrysler AG, said they are optimistic that auto sales and profits are gaining momentum, and some analysts have jumped on the bandwagon, according to Dow Jones Newswire.

The three automakers have used incentives, like zero percent financing and cash rebates, to lure

buyers in the face of losing market share to Japanese and European rivals, Dow Jones Newswire noted.

"Most analysts have been raising their estimates for the fourth quarter for GM and Ford, as I have," said David Healy, an analyst with Burnham Securities. "The Big Three did better with their automotive operations than I expected, largely due to cost-cutting and a richer mix of trucks to cars."

Early on Oct. 21, DaimlerChrysler reported a net loss of $1.9 billion in the third quarter, below analysts' expectations, mainly due to writing off an aerospace business, according to Dow Jones Newswire. In the quarter, the Chrysler unit rebounded to post a small profit of $117 million, after shocking the market by losing more than $1.1 billion in the second

quarter.

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