Ford, GM Carried by Finance Units
Despite hefty losses on the automotive side, both Ford and General Motors posted profit in the third quarter because of strong performance from their respective credit arms.
Despite hefty losses on the automotive side, both Ford and General Motors posted profit in the third quarter because of strong performance from their respective credit arms.
Ford Motor Co. reported a net profit of $266 million for the third quarter. Ford Credit's net income was $734 million, up $230 million from a year ago. On a pre-tax basis, Ford Credit earned $1.2 billion in the third quarter while Ford's worldwide automotive sector suffered $609 million in losses.
GM reported a third-quarter net income of $440 million. GMAC's profit of $656 million offset the automotive operations' loss of $130 million. GMAC's earnings were up $26 million from the same time a year ago. Lower credit losses and improved lease residual results were more than offset by lower net margins on stable asset levels.
"GMAC once again delivered very impressive financial results, in spite of the more challenging interest rate environment," said Rick Wagoner, GM chairman and CEO. "GMAC has done an excellent job diversifying its earnings base across its portfolio of global businesses, and also diversifying its funding base through new sources of liquidity both here and abroad."
"Competition in the automotive business around the globe remains intense, and we are seeing negative pricing in most major markets," Wagoner said. "Even though we increased market share in all four regions, our automotive earnings in the third quarter reflect these challenging market conditions, and were frankly disappointing."
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