August 02, 2008

A Tale of Two Industries

It was the best of times:

Oil giants Chevron Corp. and Total SA wrapped up a string of gargantuan, record-breaking earnings reports Friday, a stretch in which six of the major international oil companies topped $50 billion in combined profit for the first time.

It was the worst of times:

U.S. auto sales plunged to a 16-year-low in July, led by a 27 percent drop at General Motors Corp, as high gas prices and tight credit sent the industry into a tailspin.

I don't have the numbers handy, but I'm certain the oil companies are making more than the auto companies are losing. GM lost $15B last quarter, but that was by far the worst. Even though their are many other uses for oil than gasoline, given the ultimate dependence of the oil companies on the mass use of cars and trucks, it does make one question how long this can go on and to wonder what happens next.

Posted by Charles Austin at August 2, 2008 07:11 PM