General Motors said on Thursday that its earnings would fall this year because of rising health care costs and slowing profits at its financing division. \n"We obviously are pushing hard in '05, but we're not pleased," said John Devine, GM's chief financial officer, at an annual meeting with financial analysts. "We expect to get back on track in '06 and '07," he added. \nGM reaffirmed its previous forecast that last year's earnings would be between US$6 and US$6.50 a share when it reports its fourth-quarter results next week. But it predicted that earnings for this year would fall to a range of US$4 to US$5 a share. \nFinancial analysts had been expecting earnings in that range for this year as health care costs continue to escalate and interest rates rise, making it more expensive for GM to borrow money to pay for zero-percent financing and other low rates to entice car buyers. The General Motors Acceptance Corp, the company's financing division, has been GM's principal profit center for several years. \nThe company's debt, rated just above junk by Standard & Poor's, is also a concern. A junk bond rating would significantly drive up GM's borrowing costs across the board. To insulate a different part of its operation, GM said Thursday it was considering creating a new holding company for its residential mortgage businesses, which would result in a separate, and ideally, more favorable credit rating. \nGM executives also said Thursday that their target of returning to earnings of US$10 a share by mid-decade, first laid out in 2002, would not be met until 2007. \n"We think this target is still the right target," Devine said. "We expect earnings to increase and increase substantially from '05 to '06, and we expect them to be up again in '07." \nGM is the largest automaker in the world by volume, but its profits are dwarfed by those of competitors like Toyota and Nissan. The company is hampered on numerous fronts, including the obligation to pay health care and pension benefits to about a half million US retirees and their families. Competitors based in nations with socialized medical systems do not have similar retiree health care burdens. \nGM's spending on rebates and other incentives is also the highest in the industry. Despite that, the company's share of the US market fell to 27.5 percent last year from 28.3 percent a year earlier, according to the AutoData Corp. In Europe, the company is expecting to report its fifth consecutive annual loss and is working on its latest restructuring effort. \nSo what could lead to a stronger 2006 and beyond? \nThe company said future health care costs would moderate. And earnings are likely to be aided by new versions of large pickup trucks and sport utility vehicles for next year and 2007. Those vehicles, like the Chevrolet Silverado pickup and the Chevrolet Suburban sport utility, have been huge profit centers for GM but have not been redesigned in several years and face stiff competition from newer products, like a redesigned F-Series pickup from the Ford Motor Co and Nissan's Titan pickup.
HONG KONG SECURITY: The president blasted regulations requiring Taiwanese agents or political organizations to provide information on their Hong Kong-related activities President Tsai Ing-wen (蔡英文) yesterday warned of countermeasures should controversial Chinese national security legislation imposed on Hong Kong undermine or harm Taiwanese interests. Article 43 of the legislation empowers the Hong Kong Special Administrative Region to serve written notices to Taiwanese political organizations or individual agents to furnish information on their Hong Kong-related activities, including their personal particulars, finances, assets, expenditure and capital in the territory. Failure to comply or providing false or incomplete information can result in a fine of HK$100,000 (US$12,903) or imprisonment of six months or two years respectively. Tsai said that Taiwan would keep a close watch on how
PROBE LAUNCHED: An officer who served as a supervisor in the drill died in an apparent suicide after the accident, which was caused by unexpected waves Two marines who were on Friday injured in a military exercise in the waters off Kaohsiung passed away yesterday, Navy Command said. The marines — surnamed Tsai (蔡), 26, and a sergeant surnamed Chen (陳), 36 — were in a seven-member Marine Corps team that encountered rough seas during a simulated response to enemy forces landing on Taiwan. Their rubber craft overturned in waters off Taoziyuan (桃子園) beach in Zuoying District (左營), injuring four of the marines. They were rushed to hospital, where three of them — Tsai, Chen and a 34-year-old sergeant — were taken to an intensive care unit
MORAL COURAGE: The Ministry of Foreign Affairs urged the global community to face China’s intention to subdue Taiwan and reject such irrational requests The Ministry of Foreign Affairs yesterday strongly condemned the Chinese government for meddling with US officials’ interactions with Taiwan after FBI Director Christopher Wray revealed China’s efforts to discourage US officials from visiting Taiwan. The greatest long-term threat to the US’ information security and intellectual property, as well as its economic vitality, is China’s counterintelligence and economic espionage operations, Wray told a video event at the Hudson Institute in Washington. Beijing is engaged in a highly sophisticated and maligning foreign influence campaign, with methods that include bribery, blackmail and covert deals, he said. Giving an example, Wray said that when a US official
CAUTION: Taiwan had zero cases of death from food poisoning for six years until last year, when two people died after eating wildlife, an FDA official said The Food and Drug Administration (FDA) yesterday urged the public not to eat wildlife or unidentified wild plants, as they could be fatal, with nearly 7,000 people affected by food poisoning last year, including two deaths due to wildlife consumption. The number of food poisoning incidents increased by nearly 50 percent last year, from 398 cases involving 4,616 people in the previous year to 503 cases involving 6,944 people, FDA data showed. That figure was the second-highest in history, the FDA said, adding that the highest number was recorded in 1997, with 7,235 people. Among the 503 cases, 87 were food poisoning clusters