News briefs, part 2
GM Quarterly Loss Hits $759M
The Washington Post
General Motors Corp. Thursday reported a $752.9 million loss for the third quarter on eroding sales and market share in its core North American car market.
The earnings report comes just before GM's 15-member board is scheduled to meet in New York to pick a replacement for Chairman Robert C. Stempel, who resigned Monday under fire over the company's poor financial performance. The board also is expected to announce other major changes in GM's top management ranks at its Monday meeting.
In addition, several of the 11 directors who are not GM employees -- perhaps as many as four-might announce their resignations at the board meeting, according to sources. These longtime directors have not been as anxious for management change as those leading the shake-up. There was speculation within GM that if that happened, the resigning board members would not be replaced, solidifying the control of the directors who have engineered the management upheaval so far.
In GM's third quarter, analysts estimated that its North American losses -- a number the company does not make public -- were more than $1 billion. Some of those losses were offset by strong performances by GM's European auto operations and its non-automotive subsidiaries in the United States.
Stempel tried to put the best face on Thursday's report, noting that the loss was almost $100 million less than the company had predicted in a filing with the Securities and Exchange Commission two weeks ago.
Stempel and GM President John F. Smith Jr., in a joint statement, called the quarterly results an improvement over the third quarter of last year, when the company lost $1.1 billion. "We're ahead of schedule," they said, "in reducing the employment level in our North American operations."
U.S. Sought Saudi Aid to Block Iranian Submarine Buy
The Washington Post
The Bush administration was so alarmed earlier this year by the prospective sale of Russian attack submarines to Iran that it tried to interest Saudi Arabia in paying Russia to abandon the transaction, according to U.S. and British officials.
That gambit failed, as did direct U.S. diplomatic entreaties to Moscow. "It's not clear that there's a price that would stop the sale that the Saudis are willing to pay," said one official involved in the negotiations.
Administration officials now say the arrival of the first Iranian submarine in the Persian Gulf, expected by mid-November, will augur a new strategic challenge in the Strait of Hormuz. About 20 percent of the world's oil flows through the strait each year, and no gulf nation has had attack submarines until now. One ranking defense official, citing the 1987 operation to "reflag" and protect Kuwaiti ships against attack by Iranian warplanes, predicted that U.S. warships would again escort friendly ships if Tehran makes good on public threats to use the submarines to control the chokepoint to the gulf's oil ports.