GM's share of U.S. car market hits lowest level in 23 years Contract talks set to begin today

October 06, 1993|By Knight-Ridder News Service

DETROIT -- General Motors Corp.'s share of the American car market fell to the lowest level in 23 years in September, dropping below 30 percent for the second consecutive month.

That was a discouraging way for the world's largest automaker, which once commanded more than half of the U.S. market, to wrap up the '93 model year.

It also emphasized how devastating a strike could be as GM begins bargaining in earnest with the United Auto Workers today. Even GM's take-charge board of directors was backing away from any mandate to negotiate a drastically different, less-costly contract than Ford Motor Co. and Chrysler Corp., despite pressure from Wall Street analysts to do so.

GM is in no position to weather a protracted strike.

It has lost $17 billion in its North American automotive business since 1990. The board has mandated that those operations at least break even before taxes, interest on debts and the cost of retirees' health care.

Although the company is $1.2 billion to the good on that score through the first half of the year, later this month it will report a third-quarter loss that analysts estimate from $40 million to $100 million.

"I can tell you the board and management are together on this," said one source close to the board. "There are no factions. GM has a different situation than the other two companies. We're trying to deal with that."

While Ford and Chrysler continue growing, GM is still shrinking. In addition, many GM dealers are running short of vehicles.

The pattern-setting contract Ford and Chrysler agreed to could prove more costly for GM, especially if it must guarantee nearly full pay for laid-off workers over the next three years.

In September, GM's share of new passenger car sales fell to 29.1 percent, according to preliminary estimates by Ward's Automotive Reports, down from 29.9 percent in August. While truck sales were strong enough to bring the combined car and truck market share to 30.1 percent, the trend won't go unnoticed at the bargaining table.

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