Big Three Post 44.5% Plunge in Quarter Profits

The nation’s Big Three auto makers today reported a 44.5% plunge in combined third-quarter profits, including Ford Motor Co.’s first loss on U.S. automotive operations in nearly seven years.

General Motors Corp., Ford and Chrysler Corp., blaming lower production rates, new product development spending and higher costs of buyer incentive programs, saw combined profits decline to nearly $1.02 billion during the quarter, from $1.83 billion earned in the third quarter of 1988.

Industry leader GM posted a 39.8% decline in overall profits to $516.9 million, compared with $859.2 million a year ago. GM declined to say whether it made money on its North American automotive operations during the quarter, although industry analysts said the giant car maker may have lost about $290 million.

“All we can say is that we were in the black for the first nine months of the year,” GM spokesman Terrence Sullivan said.

No. 2 Ford, which set industry profit records last year, saw its overall profits slide 44.3% to $477.1 million, compared with $856.3 million in the year-ago quarter.

Ford disclosed it lost $37 million on its U.S. automotive operations, its first such loss since 1982, when the entire auto industry was just starting to recover from two years of red ink.

Chrysler reported an 80% plunge in third-quarter profits to $22 million, excluding a one-time gain from its sale of Mitsubishi stock worth $309 million.

The No. 3 car maker posted profits of $113 million, or 50 cents a share, in the year-ago quarter. Chrysler’s total revenues during the quarter were unchanged at $7.9 billion.