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Chrysler narrows its losses Chrylser Group LLC narrowed its losses in the second quarter of the year, and posted a better operating profit, yet another sign Detroit is bouncing back from the slump that put two of the three major auto makers into bankruptcy protection. Chrylser, still seen as lagging its rival, also said today it expects to boost its outlook for the year when it announces its third-quarter results. "The second-quarter operating profit confirms that Chrysler Group is on track to achieve its goals, yet an extaordinary amount of work still lies ahead," said Sergio Marchionne, chief of both Chrysler and its parent Fiat.
Chrysler's loss narrowed to $172-million (U.S.) in the second quarter from $197-million in the first, and operating income jumped 28 per cent to $183-million. Revenue climbed more than 8.2 per cent to $10.5-billion as vehicle sales jumped to 407,000 from 334,000. Because of its troubles a year ago, the second quarter of last year is not really comparable. The auto maker is also now hiring workers and boosting production.
Detroit has gradually been rebounding from the recession. Ford Motor Co. , for example, the only one of the three not to sink into bankruptcy protection, posted a second-quarter profit of $2.6-billion, while General Motors Co., which also slipped into Chapter 11 during the slump, is expected to post a profit later this week. And on Friday, Magna International Inc. , the auto parts giant whose fortunes ride on those of the world's big car manufacturers, posted an exceptionally strong quarter and boosted its dividend.
- Growing sales help Chrysler narrow loss
- GM, Chrysler sales surge in Canada
- Detroit's mounting a comeback - believe it
- Ford beats Street with $2.6-billion profit
- Magna soars on strong earnings
German exports climb Europe's biggest economy continues to show signs of a solid recovery. Germany, the world's second-larger exporter, said today its exports climbed 3.8 per cent in June from a month earlier to the strongest level since the depths of the global slump in the fall of 2008. On a year-over-year basis, exports rose almost 29 per cent. Imports also rose, up 1.9 per cent, also a sign that the economy is bouncing back.
Will jobs report change Bank of Canada's thinking? There's suddenly some speculation in the markets that Friday's jobs report from Statistics Canada could halt the Bank of Canada's gradual tightening of monetary policy. Central Bank Governor Mark Carney has boosted his benchmark lending rate twice now since the recession ended, and the general belief was that this would continue. But Friday's employment report showed job creation in Canada halted suddenly in July, with the loss of 139,000 full-time jobs, which was partly offset by the creation of part-time positions.
Some economists, though, believe the overall picture was skewed by 65,000 job losses in the educational services sector given that the sector posts hefty job losses every July.
"One bad jobs report and suddenly the market chatter is leaning toward doubting that the BoC will keep hiking," said Scotia Capital economists Gorica Djeric and Derek Holt. "Throw out the jobs report is our advice, and stick to the overall plot of a central bank that has every reason in the world to keep on hiking. We don't trust that so many jobs were created as reported in the second quarter, and certainly don't believe that the July report was any better in terms of its reliability, but smooth out the trend and Canada remains among a select few global leaders in the job growth tally.
"As for the July report, since when did teachers face above average job risk as to motivate a 65,000 reduction in education sector employment in one month? No, this was mostly due to the ongoing problems Statscan is having in adjusting for a shift to temporary contracts and concomitant problems in applying proper seasonal adjustments. The steep decline of 30,000 jobs in the finance, insurance and real estate services component is also tough to swallow."
- Canada's job machine goes in reverse
- Weak hiring shows U.S. recovery on ropes
- Market View: What to make of those payrolls
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Please, sir, I want some more Freddie Mac, the U.S. mortgage company seized during the crisis by the U.S. government, wants a further $1.8-billion (U.S.) in help from the Treasury Department. The company also said today it lost $4.71-billion in the second quarter, compared to a small profit a year earlier. Credit loss provisions fell to $5.03-billion from $5.67-billion. Its rival Fannie Mae lost $1.2-billion for the quarter. Including the latest request for aid, the two have now sought almost $150-billion from the government since April 2009, Bloomberg News noted.
"We recognize that high unemployment and other factors still pose very real challenges for the housing market, and with that in mind, we continue to focus on the quality of the new business we are adding to our book to be responsible stewards of taxpayer funds as we support the nation's housing market," said Freddie chief executive officer Charles Haldeman Jr.
Simmons to buy Menu Foods Menu Foods Income Fund, the Toronto pet food company with the cute ticker symbol MEW.UN, is selling its operating business to Simmons Foods Inc. of Arkansas. Menu Foods said today Simmons will acquire Menu Foods Ltd. for about $239-million, including debt, or $4.80 a unit in cash. Menu Foods was the company involved in a huge recall of pet food several years ago, when it was forced to recall tens of millions of cans.
Gordon Gekko heads to Asia One of Asia's major independent brokerages is treating its clients to Gordon Gekko, that symbol of greed born again in the wake of the financial meltdown. Michael Douglas, who portrayed Gekko in Wall Street in the late 1980s and who is reprising the role in Wall Street: Money Never Sleeps, will speak at a mid-September investors' forum organized by CLSA, the brokerage said today. Mr. Douglas, who won an Oscar for the role, will speak about filmmaking, nuclear abolition and prevention of small arms proliferation, CLSA said. It also noted that it will host the Asia premiere and first international screening of the movie.
From today's Report on Business
- The U.S. and Japan: Land of the falling price
- Focus shifts from drilling ban to 'virtual moratorium'
- There's a 'menaissance' in the ad world
- At the Top: Still trying to break the mould
- London takes gamble on Olympics to revitalize community
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