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February 2, 1967

Detroit automakers report lower profits in ‘66

Two of Detroit’s biggest auto companies reported reduced production and profits in the fourth quarter of 1966. General Motors’ net profits for the final quarter of 1966 were $276 million, or $0.97 a share, compared with $587 million or $2.05 a share in the final quarter of 1965. Ford Motor Company’s net profits declined 20% from last year, with sales almost level with last year. Net profits for the quarter declined to $64 million or 58 cents a share, compared with $162 million or $1.47 in the fourth quarter in 1965. American Motors Corp. bucked the trend, posting a modest profit for the fourth quarter of $1.5 million, or 8 cents a share. In the quarter a year earlier, AMC earned net profits at $4.2 million or 22 cents a share. [1]

The lower profits are attributed to the meltdown of the Fermi plant, which temporarily idled Ford and GM’s assembly and parts plants in the Detroit area. AMC plants, located primarily in Wisconsin and greater Toronto, were unaffected by the Fermi meltdown. [2] However, the main cause of reduced production was the closing of auto supplier factories and steel plants in Detroit’s Downriver area, which is part of the evacuation zone surrounding Fermi. Among these is McClouth Steel, one of the largest steel producers in the United States. Since October, McClouth’s Trenton and Gibraltar steel mills (in the evacuation zone) have been idle, though some production has been shifted to their smaller Detroit plant. [3] With a major local producer of automotive steel out of commission, Detroit’s automakers are looking elsewhere, even abroad, to purchase steel for manufacturing their cars.