Year-end profits better than expected

Year-end profits were better than expected at General Motors Corp. (a record $1.9 billion for the fourth-quarter) and Chrysler Corp. ($1 billion). Even Ford Motor Co., where the $660 million net was more than 60% below a year ago, came in at the upper end of Wall Street's estimates.

For all of 1995, GM made a best-ever $6.9 billion; Ford, a fourth-highest $4.1 billion; and Chrysler, a second-best $2.025 billion.

The General was glad to share the new. wealth with shareholders, raising the dividend on its common shares from 30 cents to 40 cents per quarter.

And while GM's North American performance reflected a lower tax rate and sharply higher returns on its investment portfolio, its U.S. workers will get an average $800 profit-sharing payment, the most since GM and the UAW agreed to profit sharing in 1982.

That's far less than Ford's average payout of $1,700 and Chrysler's $3,200. But Richard Shoemaker, vice president of the UAW's GM department, isn't too unhappy, largely because GM has cut its unfunded pension debt from $22 billion at the end of 1992 to about $3 billion.

GM also made less money from its international operations, due largely to the cost of launching the Opel Vectra in Europe and wage increases in Brazil. GM also ended the year with sizable inventories in the U.S. and has temporarily idled a number of car assembly plants, although some truck plants are still running on overtime.

Ford, where earnings are expected to remain below year-ago levels through the first half of this year, continues to be buoyed by a strong financial services group and a $12.4 billion cash reserve.

"We're just not oriented like a lot of people are toward quarterly profits. We want to strengthen the company for the long run," says Financial Vice President David N. McCammon, in an agile bit of spin doctoring.

Chrysler ended the year with $6.9 billion in cash, not quite the $7.5 billion nestegg Chairman Robert J. Eaton wants to weather the next downturn. For the year it earned $2,037 on each vehicle sold, well above Ford and GM.