General Motors Company
) has closed down a shift at its Brazilian facility in Sao Jose dos
Campos that manufactures Corsa, Zafira and Meriva models in an
attempt to scale back its production in the country. The automaker
aims to clear its inventories in the country's dealerships, which
is near the highest since 2008.
The company has also offered a buyout plan at the facility,
which has already been accepted by 50 workers. However, the labor
union is trying very hard to avoid layoffs by the company.
Brazil's auto market has weakened owing to huge household debts
and sluggish investment in roads leading to traffic gridlocks. Auto
sales dipped 5% in May on a year-over-year basis while average
daily volume was 12,500 in the month, which was below 13,000 this
year. This can affect major key automakers in the country including
Ford Motor Co.
) apart from GM.
Many local automakers have started idling production and
downsizing workforce due to waning exports. However, car dealers in
the country expect a boost in sales in June driven by tax
incentives, trade protection for local auto plants and lower
interest rates offered by the government.
GM, a Zacks #3 Rank (Hold) company, reported a $100 million fall
in profits to $1.6 billion in the first quarter of 2012 from $1.7
billion in the same quarter of 2011, before special items, due to
lower profits from its European operations.
On a per-share basis, adjusted profits were 93 cents during the
quarter, down 2 cents from the first quarter of 2011. However, it
exceeded the Zacks Consensus Estimate of 84 cents. Adjusted
earnings before interest and taxes dipped to $2.2 billion in the
quarter from $2.0 billion in the year-ago quarter.
Revenues in the quarter went up 4% to $37.8 billion on a 3% rise
in unit sales to 2.3 million vehicles globally. It was higher than
the Zacks Consensus Estimate of $36.4 billion. The automaker
occupied a worldwide market share of 11.3% during the quarter,
compared with 11.4% a year-ago.
FORD MOTOR CO (F): Free Stock Analysis Report
FIAT SPA (FIATY): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
(VLKAY): ETF Research Reports
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