What looked like a mess of a year for General Motors Corp. ended on an upbeat note as the world's largest auto-maker reports record fourth-quarter '98 earnings of $1.8 billion, a 12% increase over like-'97.

Although year-end earnings of $3 billion ($4.26 per share) lagged well behind '97's healthy $6.3 billion ($8.45 per share), GM demonstrated its resolve to quickly restart production following the costly two-month strike in Flint, MI. The company even reached full production of the new full-size pickups a month ahead of schedule.

GM was buoyed by strong fourth-quarter sales in North America and Europe, but losses were heavy in Asia Pacific ($116 million) and Latin America, Africa and the Middle East ($161 million).

The company also swallowed $420 million in after-tax charges, including $80 million for severances and $192 million at partsmaker Delphi Automotive Systems for voluntary retirements, the disposal of outdated plant equipment and the closure of at least two yet-to-be-announced joint ventures outside North America. The steps are being taken to prepare Delphi for its initial public offering early this month. Given a stable economy, Delphi will spin off from GM by the end of the year.

Wall Street responded favorably to GM's earnings. The company's stock climbed to $90 a share in late January, the first time since 1989.

But GM's profit sharing checks of $200 (a drop from $750 in '97) are puny in comparison to the average payout from Ford Motor Co.'s $6,100, an all-time high.

Ford posted '98 operating earnings of $6.57 billion, excluding charges for employee separations, holdings in Kia Motors Corp. and the joint venture at Ford's Batavia, OH, transmission plant and the $16 billion one-time gain from the spinoff of The Associates financing unit.

Ford's gross cash reserves are overflowing with $23.8 billion. But John Devine, Ford's chief financial officer, says the company is in no hurry to spend its "strategic asset."

South America was a trouble spot for Ford as it lost $226 million in the region in '98, and the company says the ride could get rougher this year.

The No. 2 automaker already has laid off 35% of its Brazilian workforce, but has been unable to run one plant because workers were staging a sit-in. Ford hoped to resume production at that facility Feb. 1.

As for U.S. market share, Ford's remained relatively flat at 24.6%, compared to 25% in 1997. Worldwide, the company sold 6.8 million cars and trucks, down from 6.9 million in '97. Strike-affected GM lost 2 points in U.S. market share, down from 30.8% in '97 to 28.9% in '98. Worldwide sales for GM dropped from 8.7 million in '97 to 8.1 million.

Are Small Cars Still King in England?

In a land where the streets are narrow, the parking is scarce and the gas is too expensive for guzzling, an unexpected trend is taking hold. Car buyers in the U.K. have discovered the attraction of sport/utility vehicles.

Recent figures from the London-based Society of Motor Manufacturers & Traders (SMMT) confirm that SUV sales in the U.K. are up 68% since 1993 (and 20% since 1997) to 98,757 units in 1998.

SMMT classifies them as "dual-purpose vehicles," which include Ford's Maverick (smaller than Explorer), Honda CR-V, Isuzu Trooper, Jeep Grand Cherokee, Land Rover, Nissan Terrano, Toyota RAV4 and GM's Vauxhall Frontera. One potential customer reports a several-month wait for the CR-V.

Granted, SUVs account for only 5% of U.K. vehicle sales in 1998, but on a recent trip to the U.K., one Ward's editor expecting to see few vehicles larger than a Civic marveled at the number of sport-utes cruising London and beyond.

Norman Hoggett, a 42-year-old sales manager with a northern England engineering firm, says Brits are spending more time with their families, and that the extra space in an SUV is treasured. He says drivers, particularly women, also like sitting higher up.

"People are buying them for the convenience," says Mr. Hoggett, who drives a sporty but cramped BMW M3. He borrowed a friend's Frontera for a shopping trip to France just before Christmas and fell in love with it, so he says he's thinking of giving up his coupe.

Mr. Hoggett is typical of the buyers who are finding SUVs so attractive. He's young, married, the father of two young children and well paid. "This is the vehicle for people with two kids doing fair to midland."

But, like in the U.S., you don't need children to find the allure of SUVs. "It's a yuppie vehicle," he says, not to mention more expensive. He says Toyota's high-end Land Cruiser, for instance, stickers for about 28,000 British Pounds ($46,000).

It's a premium that a growing number of buyers apparently is willing to pay.

The Boys of Cleveland

Roger Rowand and Gene Koch shared much in common. They met in the early '60s when both were posted in Cleveland, Roger with The Wall Street Journal and later the Cleveland Press, and "Cookie," as he was widely known, as a Ford Motor Co. Cleveland Bureau public relations staffer.

Both men later wound up in Detroit, Roger with several publications including Ward's Automotive Reports and Automotive News, and Gene in a series of higher-ranking PR jobs at Ford.

They, of course, kept in touch, though you wouldn't describe them as buddies. Roger remained very much the self-described "boy reporter" who was always digging. He mingled easily with PR types like Gene, but when he sat down at his typewriter (later PC) he was all business. Reporting came first, PR friendships a distant second.

Cookie was harder to figure out, both internally at Ford and externally among his press contacts. Editors such as the late Joe Callahan of Automotive Industries and Al Fleming, long an automotive editor and now a PR consultant, were close pals. Ford's all 'round PR man, the legendary Stan Drall, and Vice President-Public Affairs Dave Scott, who retired in January, also were social associates.

Partly because of some of the unpleasant tasks he was assigned, and also thanks to his tough-talking style, Cookie was not universally loved at Ford nor among the press. But you always knew where he stood: Ford first, everything else second.

Both men had led hard-charging lives. Although they gave up booze and cigarettes years ago, perhaps it was too late. During his later years Mr. Rowand, a former U.S. Navy corpsman, volunteered each weekend at Detroit's Receiving Hospital, where Saturday night shootouts provided plenty of action. An avid reader and expert on the U.S. presidency, Mr. Koch dabbled in politics as part of the Ross Perot movement after retirement.

Both men died recently, Mr. Rowand at 72 in Florida and Mr. Koch at 71 in his native Minnesota - at opposite ends of the country and a long way from Cleveland, where as fresh-faced young men their outwardly parallel, yet distinctly divergent, careers were just getting under way.

I knew and worked closely with them during some of the most exciting days on the automotive beat, and I considered them friends. Somehow it won't be quite as much fun. - Dave Smith