Newspaper article The Florida Times Union

Morning Briefs

Newspaper article The Florida Times Union

Morning Briefs

Article excerpt

JAPANESE CARMAKERS INCREASE PROFIT GAP

Japanese automakers widened their profit-making gap over the Detroit Three last year by 32 percent, according to a study released Tuesday.

The profit gap, which already was significant in 2005 at $2,899 per vehicle sold in North America, widened by $915 to $3,814, according to a study of industry costs and profits by Laurie Harbour-Felax, managing director of Stout Risius Ross, a Chicago-based financial and operational advisory firm.

The study found that while General Motors Corp. had improved its efficiency and cut production costs, the nation's largest automaker and its Detroit counterparts, Ford Motor Co. and Chrysler LLC, still have a long way to go to match the profits of Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co.

GM made $2,123 less per vehicle than Toyota in 2006, according to the report. Toyota, the most profitable of all automakers on a per-vehicle basis, increased its profit per vehicle from $1,175 in 2005 to $1,977 in 2006, the report said.

Ford, while it has made progress on cost cuts, common parts and globalization, still had a $3,939 profit gap in 2006 compared with Toyota, the study said.

Chrysler's gap with Toyota averaged $3,088 per vehicle for 2006 because it was selling vehicles with heavy incentives.

Associated Press

FORMER BROCADE CEO CONVICTED IN FRAUD CASE

Former Brocade Communications Systems Inc. CEO Gregory Reyes was convicted Tuesday of defrauding investors in the first stock options backdating case to go to trial.

Backdating is the practice of selecting favorable grant dates in the past when the company's stock price was low, and retroactively pegging awards to those dates. The goal is to boost the recipient's potential windfall, and it's only illegal if it's not properly accounted for.

Reyes' defense lawyer, Richard Marmaro, said only that he plans to appeal. U.S. District Judge Charles Breyer scheduled Reyes' sentencing for Nov. 21. He could face a decade or more in prison. …

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