While Wall St. short sellers seem to be betting against Ford, may are not willing to wager that GM will drop as well. Short interest in the world’s largest auto maker fell by 5.9 million shares to 51.7 million.
The gamble is not necessarily a safe one. GM is offering sales incentives of about $3,000 a car to move inventory. And, Toyota could pass GM as the world’s largest car maker. The press has been pushing Toyota’s move into first place as a sure thing.
But, it may not be that simple. With GM’s focus on markets like Russia and China, it could beat Toyota handily in unit sales in fast growing markets.
GM has taken almost $9 billion in annual costs out of the company to try to get North America profitable again. It is clear that GM will go back after the UAW in contract negotiations that will begin in September 2007. What is less clear is how hard the UAW will push back.
GM got it house in order faster than Wall St. thought it would. Now, can they keep it that way?
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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