43
GM, Ford leaders try to calm jitters
ASSOCIATED PRESS
Photo
General Motors CEO Dan Akerson addresses the media before the company's shareholders meeting in Detroit, Tuesday, June 7, 2011. Akerson said he's concerned about the U.S. government's high deficit and what he called a jobless economic recovery. (AP Photo/Carlos Osorio)
Associated Press
DETROIT
General Motors and Ford are trying to reassure investors that their sales and profits will keep growing despite a weaker U.S. economy and slower auto sales
Carmakers have been hit with a string of bad news this spring, from the March 11 earthquake in Japan that left dealers short on cars to rising gas prices and unemployment. U.S. auto sales fell in May, their first monthly decline this year.
The news has hurt. GM’s shares have lost almost 13 percent of their value since selling for $33 per share in a public stock sale last November. Ford’s stock price, meanwhile, has fallen more than 9 percent since the start of May.
On Tuesday, GM’s CEO highlighted the company’s healthier finances at its annual shareholder meeting in Detroit, while Ford unveiled an expansion plan to investors in New York. The message was the same: The companies’ turnarounds remain on track following years of struggle and, for GM, bankruptcy.
“The bankruptcy, as difficult as it was, may have been not only a second chance, but a rebirth of a great 21st century global manufacturing company that is no longer burdened by the past,” GM CEO Dan Akerson said.
The messages seemed to take. GM shares rose 1 percent to close at $28.78, while Ford’s rose slightly to close at $13.95.
Jeffries auto analyst H. Peter Nesvold said larger economic worries have been overriding many companies’ performances, including GM’s and Ford’s.
“It makes it very difficult for companies executing well to get recognition for it,” he said.
Akerson said he isn’t worried about GM’s falling stock price. The company has performed in line with its competitors, all of which have seen stock declines in recent months. Akerson recently spent $940,000 of his own money to buy 30,000 GM shares.