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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: mishedlo who wrote (45263)1/26/2006 2:03:40 PM
From: shades  Read Replies (3) of 116555
 
DJ GM CFO Expects Capital Spending To Be Flat In 2006

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By John D. Stoll
Of DOW JONES NEWSWIRES


DETROIT (Dow Jones)--General Motors Corp. (GM) Chief Financial Officer Fritz Henderson said Thursday the company expects capital expenditure levels to be about flat in 2006 with the approximately $8 billion spent last year.

"It will be in the 2005 range," Henderson said in a conference call with investors and analysts. He pointed to GM's emphasis on launching critical GMT-900 large SUVs and pickups and other vehicles throughout the world as big spending drivers. He described the expected 2006 spending level as "healthy" and said a decline in spending vs. 2005 is not likely.

In 2005, GM's capital spending increased roughly $1 billion from the $7 billion spent in 2004, GM spokeswoman Toni Simonetti said. In addition to launching new trucks and SUVs, the auto maker is rolling out a new Corsa small car in Europe, which Henderson said is "critical" to the auto maker's ongoing efforts to mount a comeback in the region.

While Henderson is bullish on GM posting a better financial performance in 2006 and 2007, he said three major factors are holding the company back from furnishing concrete earnings guidance going forward. Ongoing talks with bankrupt supplier Delphi Corp. (DPHIQ), timing on when benefits from United Auto Worker union health care concessions kick in, and the fate of its quest to sell a majority stake in General Motors Acceptance Corp. are leading issues contributing to uncertainty.
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