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EuroWire – January 2008
32
Transat lant ic Cable
Taken by itself, the SoCal manufacturing base would
rank third among states, after California as a whole and
Texas. According to the Los Angeles County Economic
Development Corp, the 808,000 factory jobs in Southern
California account for just over 11% of total employment
in the region.
Los Angeles County itself is the nation’s largest
manufacturing centre, and its 462,300 jobs in the sector
top the Chicago-area total by more than 72,000. These
manufacturers are primarily small businesses. More than
two-thirds of all manufacturing jobs in Los Angeles County
are at companies with fewer than 250 employees.
California has suffered from the nationwide attrition in
manufacturing in recent years, having lost a net 464,000
factory jobs since 1990. Almost 350,000 of these losses
were in Southern California, according to the California
Economic Forecast, a private economic research firm based
in Santa Barbara.
Automotive
General Motors hits a massive speed-bump
along the road to recovery
After three straight quarters of profit-
ability, the Detroit auto giant General
Motors Corp on 7
th
November posted
a stunning third-quarter 2007 loss of
$39 billion. By way of comparison, its
year-earlier loss was $147 million.
The results were all the more startling
for their emergence from a stream of
good news for GM last year. Not only
had the company taken back its position
as the world’s biggest car maker from
Toyota Motor Corp, of Japan; it had
also concluded a landmark labour deal
with the United Auto Workers that
would greatly ease a crushing burden of
responsibility for long-term health care
for retirees.
Almost all of the staggering loss – some
$38.6 billion – was attributed by GM
to the loss of deferred tax assets in the
US, Canada, and Germany. To qualify for
deferred tax assets, a company must be
reasonably confident it will have taxable
income. GM could not give that assurance,
its confidence having been shaken by
slow earnings growth in its core North
American market and in its lending unit.
Overall, the company sold 4% more cars
and trucks in the third quarter, raising
its automotive revenue to $43.1 billion
from $39.6 billion in second-quarter
2007. GM linked the rise to ‘exceptionally
strong’ demand in emerging markets and
improving developed-market demand.
GM’s adjusted net income in the Asia
Pacific region rose to $138 million in the
quarter from $57 million, on strong export
growth from GM Daewoo, continued
strong sales and profitability in China, and
improved earnings in India and Australia.
Even after the third-quarter results were
posted, not all industry servers soured on
General Motors.