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Winnipeg Free Press - PRINT EDITION
GM shares tops among automakers
Nathan Denette / The Canadian Press archives Despite trouble at its European operations, General Motors shares soared. (CP)
DETROIT -- The top-performing stock among U.S. automakers this quarter is General Motors.
The company, which endured management upheaval during the quarter and announced it would lose substantial cash in Europe, saw its shares rise almost 18 per cent from July through late September. The gain was the best since the first quarter of this year, when the stock climbed about 23 per cent. GM posted strong profits in that period.
GM stock has outperformed all other major automakers in the U.S. including rival Ford Motor Co., which saw its shares rise only 5.5 per cent. Only Nissan Motor Co.'s U.S. shares came anywhere close to GM's stock appreciation. They were up almost 11 per cent.
General Motors Co.'s gains for the quarter surprised observers, given publicity about management changes and the continued sales slump in Europe that has hit nearly every major automaker.
During the quarter, GM ousted its marketing chief and the head of European operations. It lost several other key executives including its top electric-car engineer and head designer in Europe. Investors now realize most of the departures signal GM is making necessary changes. That's better than sweeping management problems under the rug like it did in the past, said Bill Selesky, an analyst for Argus Research. The changes, he said, have set GM apart from its peers this quarter.
"I think people are now looking at the company and saying they're more proactive," Selesky said. "They're not the same company my father used to know."
For the quarter, GM shares gained $3.48, rising from $19.70 on July 2 to close at $23.18 on Thursday. The stock pulled back a little in morning trading Friday, the last trading day of the quarter, falling 1.6 per cent to $22.81.
Shares of Japanese rivals Toyota Motor Corp. and Honda Motor Co. each lost ground during the quarter, with Toyota down slightly and Honda off almost eight per cent.
GM made $2.5 billion through the first half of the year. But it's predicting lower profits in the second half as losses continue in Europe. Car sales are in their fifth straight year of decline there, and GM has lost money in Europe for a dozen years.
-- The Associated Press
Republished from the Winnipeg Free Press print edition September 29, 2012 B8
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