For GM, a ray of light in the long tunnel

Should Wall Street look past General Motors' (NYSE: GM) Q3 earnings? Probably. The reason is that GM's Q3 results mask significant progress made by the auto giant.

Fortune magazine argues that GM's $39 billion Q3 loss, due mostly to an accounting adjustment, obscures genuine progress and detracts from other metrics that indicate that GM is ahead of Ford (NYSE: F) in the turnaround race.

After citing roughly comparable pre-tax losses and market share losses, Fortune noted GM's comparatively stronger line-up than Ford's, which includes the launched Cadillac CTS and the soon-to-be, much-anticipated, new Chevy Malibu.

The article also contrasted GM's cost cutting progress -- $8 billion in hourly labor costs saved over past five years -- while noting that Ford still needs to re-double cost reduction efforts in advertising, engineering, material and employment costs.

GM's shares fell $1.50 to $27.77 while Ford's shares declined 18 cents to $7.52 in Monday afternoon trading, amid a broad market sell-off.

Auto Analysis: GM CEO Richard Wagoner has positioned this company slightly ahead of Ford, led by CEO Alan Mulally, but it's important for investors to remember that GM and Ford are not vying only with each other, but with the rest of the world. The pair's position is roughly akin to two horses jockeying for fourth place in a horse race. (And by some metrics, fifth or sixth place.)

Each must introduce additional, innovative vehicles and efficiency improvements, among other fleet changes, in order to attract young-adult buyers to their showrooms and more effectively compete with Nissan, Toyota, Honda, and a host of European manufacturers. With the above in mind, GM's recent accomplishments must be viewed from the proper perspective: as a ray of light in a long tunnel.

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