GM and Ford Report Sharp Profits Drop : Earnings: Figures from the nation’s biggest auto makers reflect recession in their industry.

General Motors Corp. earnings fell by 50% and Ford Motor Co.’s profit tumbled by 72.9% in the fourth quarter, the nation’s biggest auto makers reported today in results that reflect their industry’s recession.

GM, the nation’s biggest corporation, posted a profit of $700.2 million, in the three months ended Dec. 31, compared with earnings of $1.4 billion during the fourth quarter of 1988. GM’s fourth-quarter earnings tumbled to $1.01 per share of common stock, compared with $2.12 the year before.

Earlier, Ford posted a profit of $314 million, or 68 cents a share, during the fourth quarter compared with $1.16 billion, or $2.42 a share, in the year-earlier quarter.

Ford earnings declined largely because of a $424-million loss linked to the sale of its Rouge Steel Co. subsidiary, but even without that factor Ford’s fourth-quarter earnings were down 36.3%.

For all of last year, GM’s profits fell 13.1% to $4.22 billion, on revenue of $112.53 billion, compared with a profit of $4.86 billion on revenue of $110.23 billion in 1988. Annual per-share earnings dropped to $6.33 from $7.17.

The year-end figures represent the first time since 1985 that GM out-earned No. 2 Ford.

For the entire year, Ford’s earnings fell 27.6% to $3.84 billion, or $8.22 a share, from $5.3 billion, or $10.96 a share, during 1988.

Together with Chrysler Corp., which Tuesday reported a $664-million loss during the fourth quarter, the nation’s Big Three auto makers made $370.2 million in the period, down 87.7% from the $3 billion the companies reported in profits in 1988.

The earnings reflect the slump the auto industry entered in October, as the 1990 model year opened, and the costs of incentives the auto makers used to try to spur sales.

Auto makers have closed plants and laid off thousands of workers as they cut production to bring it more in line with slow sales.

The industry began a rebound in January, but that mainly came about because of incentives, which cut directly into profits.

GM’s fourth-quarter earnings came on revenue of $27.7 billion during the 1989 period, compared with $28.85 billion in revenue a year before.

In the United States, GM’s profits for 1989 were down 56%, indicating that hourly workers will receive sharply lower profit-sharing checks this spring than the average of $2,800 each received last year.

Ford’s revenue in its automotive and financial services business for the quarter amounted to $24.15 billion, compared with $23.91 billion in 1988. Its automotive revenue fell 4% while financial services revenue rose 40.2%.

On Dec. 15, Ford sold its Rouge Steel operation to Marico Acquisition Corp., a company formed solely to buy the financially troubled steelmaker. That and Ford’s announcement last month that its Ford Aerospace Corp. will be sold indicate that the company is moving away from non-automotive businesses and back to cars and financial services.

GM’s profits in its North American automotive operations slumped during the period, but the company did not immediately provide figures.