Porsche gains on its stock market dealings

Porsche says it made 6.83 billion (5.5 billion) from trading in VW options and a further 1 billion (800 million) from the rising value of its stake in the larger company, in the financial year that ended in July.

This helped Porsche to increase its pre-tax profit by 46 per cent to 8.57 billion (6.8 billion) although its dealings in VW shares have caused controversy in financial circles with some people calling for an investigation by the German stock market watchdog BaFin.

Last month, VW's shares rocketed after Porsche unexpectedly disclosed that it had increased its stake in VW from 35 per cent to 74.1per cent.

Not such good news across the Atlantic where GM reported its fifth straight quarterly loss, called off its merger talks with Chrysler and warns it may not have enough cash to operate by mid-2009.

Net loss was $2.5 billion (1.6 billion), while revenue fell $5.8 billion (3.7 billion) to $37.9 billion (24 billion), and worldwide deliveries dropped 11 per cent. CEO Rick Wagoner emphasised that bankruptcy is not an option and added: "The consequences could be dire and beyond just GM. We will take whatever actions we can to avoid it."

In Europe GM's revenue was down 15 per cent to 8.8 billion (7.1 billion) in the third quarter as volumes dropped across the region. Sales are down 12.3 per cent against last year although they have risen 10 per cent in Eastern Europe.

Ford is not suffering quite so badly, posting a net loss of $129 million (82 million) for the third quarter of 2008, an improvement on the $380 million (240 million) net loss in the same quarter last year. It says more US jobs will go but most new product development will continue.

It plans to achieve $5 billion (3 billion) in cost reductions in the U.S. by the end of this year compared with 2005 and is planning further cost and cash improvements including further cuts in North American salaried workers, a reduction in capital spending, manufacturing, information technology, and advertising costs.

Ford of Europe reported a pre-tax profit of $69 million (81.5 million), compared with $293 million (185.5. million) in 2007 with revenue of $9.7 billion (6.1 billion) up from $8.3 billion (5.2 billion).

Credits: JRC