Porsche Ends Slump as 1989 Profits Double

Sports car maker Porsche has turned the corner after a two-year slump, the company said today.

“It was a strongman act,” Chairman Heinz Branitzky told reporters after the company announced that profits doubled in the fiscal year ending July 31 despite production problems and the introduction of four new models.

Stuttgart-based Porsche reported earnings of $32.3 million for the year, compared with $15 million in the previous year.

Sales rose only slightly to $1.5 billion from $1.48 billion.

The gain in earnings was due to a combination of a cost-cutting program, which reduced the 8,000-person work force by about 500 over the last two years, and an emphasis on more expensive and profitable cars.

The new strategy was adopted after earnings and sales slumped following the 1987 stock market crash. Porsche’s main customers suddenly found their wealth and jobs at risk, and a falling dollar took a bite out of the company’s earnings.

In the latest fiscal year, Porsche cut back production of its less expensive 924 and 944 cars and introduced four restyled models.