Home was where the hemorrhaging happened three years ago when two Detroit automakers headed for bankruptcy and a third suffered record losses. Now North America has become a money machine for the Detroit Three, which earned $4.5 billion there in the first quarter on surging U.S. sales.
General Motors Co. (GM), Ford (F) Motor Co. and Chrysler Group LLC exceeded estimates with first quarter net income that totaled $3.2 billion. The most pleasant surprise was healthy North American operating margins of 11.5 percent at Ford, 7 percent at GM and 4.5 percent at Chrysler. Even combined losses of $405 million in Europe for GM and Ford were better than analysts anticipated from a region in an intractable financial crisis.
Investors remain impatient. Despite all three automakers exceeding estimates, investors are dumping shares as if Detroit is on the road to ruin. GM fell 18 percent before today from its peak this year at $27.34 on Feb. 17. Ford dropped 16 percent since peaking this year at $12.96 on Feb. 6. Chrysler has put off an initial public offering, which is unlikely to occur this year, Marchionne said last week.
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