But one thing appears certain for domestic automakers following General Motors Corp.’s first-quarter results released Wednesday: The U.S. auto industry’s future success will depend on how well it does in other parts of the world.
Like Ford Motor Co. last week, strong international sales kept GM’s quarterly loss smaller than expected, boosting the company’s stock to its best single-day performance in seven months. GM’s share price jumped $2 and closed at $23.20, a 9.4 percent jump from Tuesday.
GM’s loss for the quarter was sizable at $3.25 billion, or $5.74 a share. But excluding one-time charges, the loss was $350 million, or 62 cents a share, which was sharply less than the $1.60 per-share average loss forecast by analysts polled by Thomson Financial.
“It was a big loss, for sure, but GM is doing well in emerging parts around the world,” said George Magliano, Global Insight’s director of automotive research for the Americas. “Doing well internationally is probably the way to go now for all U.S. manufacturers now.”
GM posted a pretax profit of $1 billion in its international business, more than offsetting an $812 million pretax loss in North America.
Total revenue for the three months was down to $42.7 billion from $43.4 billion last year. However, revenue outside North America was up 20 percent for the quarter.
“We continue to leverage our global product portfolio to take advantage of tremendous growth in key emerging markets, while at the same time taking the appropriate actions to deal with the challenging economic conditions in the U.S.,” GM’s chairman and chief executive, Rick Wagoner, said in a statement.
The domestic challenges also include a two-month strike at a big GM supplier, American Axle and Manufacturing Holdings Inc. The strike has affected 30 GM plants, mainly those involved in producing sport utility vehicles and minivans. The company said Wednesday that the strike had cost it $800 million and the production of 100,000 vehicles.
Also, GM’s labor problems recently spread to some of its own facilities as individual plants try to negotiate local agreements to supplement the national bargaining contract. Many industry analysts believe the United Auto Workers union is trying to push GM to use its influence to bring a settlement in the American Axle dispute by creating negotiating pressure at its more profitable plants.
One of those plants seeking a local agreement is the Fairfax facility, which makes the strong-selling Chevrolet Malibu. The UAW’s five-day strike notice for the plant expired last Friday, and the company and the union have continued talking this week. The union would now be required to give a 12-hour notice before taking a job action at the plant.
“The American Axle strike is a mess, and it’s a mess for other suppliers and a mess for GM,” Magliano said. “But the issue is not so much the pickups and SUVs GM can’t build right now. But if this situation starts to affect the production of Malibus and Cobalts and some of their other better-selling cars, then it could really hurt GM.”
The UAW has denied that the local disputes at GM facilities are related to the American Axle strike, and some analysts have agreed that GM’s national contract left key issues to be resolved by the local unions at the individual plants. At Fairfax, union officials have said that seniority rights and job security issues concerning work historically done by its members are at stake in the current round of bargaining.
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