GM Strike Sends Profits Plunging
MIAMI (AP) _ Ryder System Inc. said Thursday its profit fell by nearly half in the first quarter as its auto carrier division reported a loss because of a strike at General Motors Corp., its biggest customer.
In addition, Ryder chairman M. Anthony Burns complained that profit margins were not growing fast enough and promised ``bolder action to cut our costs.″
Ed Huston, the chief financial officer, said: ``We’re asking everybody in the company to look at what they do and see how it adds value to the customer.″ Huston said the biggest savings may come as centralized purchasing, long in place with vehicles, is adopted for office needs.
The trucking business said Thursday it earned $10.2 million, or 13 cents a share, down 46 percent from the $18.8 million, or 24 cents a share, in the first three months of last year. Revenue rose almost 8 percent to $1.33 billion from $1.23 billion.
A part of the decline in profit was attributed to the strike last month that virtually shut down GM’s North American operations. Ryder said that led to a $3.3 million pretax loss for the auto carrier division compared with a $9.53 million profit a year earlier.
Ryder said the results for what traditionally is its weakest quarter also were hurt by a snowy winter, international expansion costs, lower commercial truck rental demand and lower gains on the sale of used vehicles.
In trading on the New York Stock Exchange, Ryder was up 50 cents at $28.75 Thursday afternoon.