Business Notes AUTOS

Detroit's automakers, awash in profits for the past four years, are in a severe drought. When the Big Three last week announced their profits for the fourth quarter, the cost of their incentive programs was all too clear. While car sales dropped 20%, profits plunged much more. Ford's declined 73%, to $314 million, while General Motors' fell 50%, to $700 million. Chrysler lost $664 million, its first deficit since 1982.

Because of an auto-production glut and a consumer hunger for bargains, the Big Three have become dependent on incentives to move merchandise. Result: even when car sales are decent, profit margins are thin. General Motors said it gave up $5 billion in incentives in 1989, or $900 for every vehicle it sold. Ford pegged its incentives at $1,000 per vehicle, Chrysler at $1,200. As part of its current restructuring, Chrysler last week announced the $825 million sale of its aircraft subsidiary, Gulfstream Aerospace, to a management-led group.