DETROIT — General Motors and Ford are trying to reassure investors that their sales and profits will keep growing despite a weaker U.S. economy and slower auto sales.
Carmakers have been hit with a string of bad news this spring, from the March 11 earthquake in Japan that left dealers short on cars to rising gas prices and unemployment. U.S. auto sales fell in May, their first monthly decline this year.
The news has hurt. GM’s shares have lost almost 13 percent of their value since selling for $33 per share in a public stock sale last November. Ford’s stock price, meanwhile, has fallen more than 9 percent since the start of May.
On Tuesday, GM’s chief executive highlighted the company’s healthier finances at its annual shareholder meeting in Detroit, while Ford unveiled an expansion plan to investors in New York. The message was the same: The companies’ turnarounds remain on track following years of struggle and, for GM, bankruptcy.
“The bankruptcy, as difficult as it was, may have been not only a second chance, but a rebirth of a great 21st century global manufacturing company that is no longer burdened by the past,” GM chief executive Dan Akerson said.
The messages seemed to take. GM shares rose 1 percent to close at $28.78, while Ford’s rose slightly to close at $13.95.
Jeffries auto analyst H. Peter Nesvold said larger economic worries have been overriding many companies’ performance in recent weeks, including GM and Ford.
“It makes it very difficult for companies executing well to get recognition for it,” he said.
Akerson said he isn’t worried about GM’s slumping stock price. The company has performed in line with its competitors, all of which have seen stock declines in recent months. Akerson recently spent $940,000 of his own money to buy 30,000 GM shares, a gesture executives often use to boost confidence in a company.
Ford reported a $2.6 billion profit in the first quarter, its eighth straight quarterly profit, while GM earned $3.2 billion for the quarter. But that hasn’t kept investors from getting skittish, particularly about the fragile economy, the rising cost of steel and other raw materials, high gas prices and tough competition from Hyundai.
George Magliano, an analyst with IHS Automotive, said Ford has solid leadership in CEO Alan Mulally and ambitious growth plans, but it will need to show results.
“Mulally’s righted the ship in North America, but now he’s really got to address the needs in the rest of the world,” he said.
