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GM, Ford Shares Keep Rising

Shares of GM and Ford appear set to jump again even after hitting new highs this week thanks to booming auto sales, signaling a dramatic turnaround for the companies.

DETROIT (AP) -- Shares of GM and Ford appear set to jump again Thursday even after hitting new highs this week thanks to booming auto sales.

Both companies posted strong sales gains for the year on Tuesday as the U.S. auto market rebounded last year from 2009, the worst sales year since 1982.

Shares in both companies, now a hot commodity, signal a dramatic turnaround for the Detroit-area companies, which just two years ago were on the brink of financial ruin. GM needed a $49.5 billion government bailout to stay alive through bankruptcy protection, while Ford borrowed more than $23 billion to avoid government aid and fund its own restructuring.

On Tuesday, Ford reported that its sales rose 15 percent for the year, and it grabbed market share from rivals for the second year in a row. GM sales rose 6.3 percent as it shed brands to focus all of its energy on Chevrolet, Buick, GMC and Cadillac.

For the year, U.S. car and truck sales came in at 11.6 million, up 11 percent from last year, and in December alone, sales were 1.14 million, also up 11 percent from a year earlier.

Both Ford and GM predicted a better year in 2011, with GM saying it expects U.S. sales in the 13 million range in 2011, which would be back to the 2008 level but far short of the 2005 peak of 17 million.

Barclays Capital analyst Brian Johnson said full-size pickups made up 13 percent of the seasonally adjusted annual sales rate in December, reaching a level not seen since 2008. Automakers said small businesses seem to be back in the market, replacing aging pickups that were kept on the road during the recession. GM and Ford have the top-selling pickup trucks in the U.S.

"This is good news for GM, Ford, and the (parts) suppliers most exposed to their platforms," Johnson wrote in a note to investors. Suppliers of truck parts include American Axle and Manufacturing Holdings Inc., Dana Holding Corp., Lear Corp. and Tenneco Inc.

Ford's retail sales to individual buyers, which are more profitable than sales to big fleet customers, increased 22 percent in December over the same month last year, while GM gained 20 percent in retail sales. That beat the industry average, which Johnson estimated at 17 percent.

Shares of General Motors Co. and Ford Motor Co. rose about 1 percent in premarket trading, with GM rising 29 cents to $38.36 and Ford up 11 cents to $18. In Wednesday trading, Ford hit a 52-week high of $18.09 Wednesday before falling back to close at $17.89, while GM stock rose to $38.30, its highest point since the company returned to the market with an initial public offering in November.
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