GM, Ford beat projections; Japan brands still gaining
By Rick Popely
Chicago Tribune
Strong performances by General Motors Corp. and Ford Motor Co. boosted September auto sales above expectations, but major Japanese brands continued to gain market share.
While most analysts expected disappointing results from the two largest automakers, GM's sales rose nearly 18 percent from September 2002 and Ford's were up 5 percent. Both credited brisk truck sales, but GM's car sales also increased 14 percent for the month, revved up by rebates of up to $4,000 on 2003 models.
Sales at the Chrysler Group, the domestic unit of DaimlerChrysler, were down 11 percent from a strong showing a year earlier.
Strong sales by GM and Ford, however, did little to mask the domestic automakers' struggles to compete with the Japanese.
Ford said this week it would cut more than 3,000 North American salaried and contract positions to cut costs. Yesterday, the automaker said it would cut 3,000 more jobs at a plant in Belgium.
Media reports from Detroit said Chrysler wants to reduce its skilled workforce to 7,000 employees from 12,000.
Oct. 1 is the traditional start of the new model year, and all three domestic manufacturers marked the occasion by announcing incentives yesterday on most 2004 models, including zero-percent financing for up to five years.
Van Bussmann, senior vice president of J.D. Power and Associates, said the hefty incentives on 2004 models underscore that domestic manufacturers have to sacrifice profits to stem market share losses to Toyota, Honda and Nissan.
Incentives, he said, only delay the inevitable that domestic manufacturers have to trim jobs and close plants.
"They're beset by overcapacity, and they can't cut costs fast enough unless they bite the bullet and say they are going to close down some plants and reduce capacity," Bussmann said.
In previous recessions, the auto industry idled plants, furloughed workers and rode out losses until the economy bounced back. This time, he said, domestic automakers kept their factories running and propped up sales with rebates and interest-free loans.
