General Motors share takes a beating as Toyota shines
The worldâ€™s largest automaker General Motors has taken a beating this year. They are making huge losses in their operations in North America, they are closing plants, and they are cutting down on their workforce. Worse, the companyâ€™s share is taking a beating in the share market as well as they have dropped to their lowest level in 23 years.
The shares fell by as much as 5.7 percent yesterday in New York Stock Exchange. Toyota is also catching up fast with them and have plans to come as close as possible in vehicle productions next year. Market experts believe that Toyota should be able to overtake GM in worldwide sales by 2007 if they could not in next year.
GM shares have lost as much as 52 percent of their value amid four consecutive quarters of losses. This price is at an 80-year low and there is little hope of this situation getting any better in the near future. The company made losses of around $4.8 billion in North America this year as its sales. The American customer has developed a liking for reliable and fuel efficient Japanese cars and are no longer purchasing fuel guzzling SUVs which have been GMâ€™s dominating area.
GM Chief Executive Rick Wagoner dropped a bombshell when he announced on Nov. 21 that they would be cutting 30,000 North American jobs and close or limit production at 12 plants. The aim is to cut costs in their North American operations by over USD 7 billion. It would be interesting to see if GM ever comes out of this financial mess, they are currently in.