Analysts: GM may have turned corner

March 15, 2007 at 6:40 PM
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DETROIT, March 15 (UPI) -- General Motors Corp. may have hit bottom and begun a sustainable recovery, several U.S. automotive analysts say.

"It's the real beginning of a turnaround," says forecasting Director Erich Merkle of automotive research group IRN Inc. in Grand Rapids, Mich.

The No. 1 U.S. automaker posted a $950 million net profit in the final three months of 2006, largely on the strength of cost cutting and growing consumer acceptance of its new car and truck models, the company said Wednesday.

GM said it intended to cut $9 billion in costs this year, up from $6.8 billion last year.

"That's real money," Merkle told Michigan's Booth Newspapers.

GM Chief Financial Officer Fritz Henderson said he expected further earnings improvements this year, but would not give estimates.

Analyst Dennis Virag of Automotive Consulting Group Inc. in Ann Arbor, Mich., says GM earned a profit, "but they have a long way to go" to be financially healthy.

The automaker "has to stem its market share erosion so that it can move forward rather than continually retrench," he says.

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