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Time - Man of the Year
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Time_Man_of_the_Year_Compact_Publishing_3YX-Disc-1_Compact_Publishing_1993.iso
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081092
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08109911.000
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1993-04-08
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THE WEEK, Page 19BUSINESSStruggling Back Into the Black
Ford and Chrysler make some money for a change
Detroit finally had something to smile about. After 15 months
of record-breaking losses that were included in last year's total
of $7.5 billion for the U.S. auto industry, both Ford and
Chrysler reported solid second-quarter earnings gains totaling
$680 million. And the government of China put in an order to the
U.S. Big Three for $130 million worth of utility trucks and
minivans -- about what they sell during a full year in Japan.
Though Chrysler's hot-selling Viper muscle car ($50,000)
and Grand Cherokee sports utility vehicle ($20,000) were on the
market during part of the reporting period, these profits -- the
first since the recession began in 1990 -- came less from new
product than from continuing cost-cutting programs and
reductions in rebates and discounted fleet sales. Even so, there
were encouraging signs that both companies might extend their
winning streak. Ford's conservatively restyled Taurus has come
up a winner in the high-volume midsize-sedan market and is
steadily gaining on Honda's Accord as the nation's best-selling
car. Chrysler has nothing but new products to come, including
its own line of sleek midsize LH sedans to be introduced this
fall.
A single quarter, of course, does not guarantee a full
year's comeback. Citing the U.S. economy's anemic 1.4% growth
in gross domestic product, Ford's chairman, Harold Poling,
warned that his company intended to stockpile its winnings
against a traditionally weak third quarter and refused even to
chip in a dividend boost for shareholders. General Motors is
expected to remain in the losers' column when it reports its
quarterly earnings this week, mainly because of huge write-offs
from its troubled Hughes defense subsidiary. "We haven't had any
real recovery yet," cautions Shearson Lehman analyst Joseph
Phillippi. "The automakers are not doing badly, but they're
still struggling." But for a change, the only red in Detroit's
auto shops was to be found on its sporty new convertibles.