Ford, GM financial arms face writedowns
Ford Motor’s and General Motors’ financial arms may need to write down $1.1 bn and $1.5 bn, respectively, an analyst said.
By Agencies |
BANGALORE\DETROIT: Ford Motor���s and General Motors��� financial arms may need to write down $1.1 billion and $1.5 billion, respectively, said a Lehman Brothers analyst, who expects US auto credit to be pressured by a weakening used-car market.
The weakening used-vehicle market creates a growing problem for the financial arms of GM and Ford as residual values of lease vehicles are likely to be significantly lower than originally expected, analyst Brian Johnson said. ���This is especially true for traditional trucks, which have been disproportionately hurt by the accelerating mix shift towards more fuel-efficient cars,��� Johnson said.
In a related development, billionnaire investor Kirk Kerkorian has raised his stake in Ford to 6.49%, saying he would consider throwing additional money into the struggling automaker���s turnaround effort.
The weakening used-vehicle market creates a growing problem for the financial arms of GM and Ford as residual values of lease vehicles are likely to be significantly lower than originally expected, analyst Brian Johnson said. ���This is especially true for traditional trucks, which have been disproportionately hurt by the accelerating mix shift towards more fuel-efficient cars,��� Johnson said.
In a related development, billionnaire investor Kirk Kerkorian has raised his stake in Ford to 6.49%, saying he would consider throwing additional money into the struggling automaker���s turnaround effort.
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