nterest rate environment led to an acceleration of loan prepayments as more customers refinanced their mortgages requiring a write-down of mortgage servicing rights. Absent this write-down, mortgage operations remained strong with a significant increase in mortgage originations and record earnings from GMAC Commercial Mortgage and Residential Funding Corporation (GMAC's residential mortgage conduit operation). Overall, GMAC remains on track for another record year in 2001. GM NORTH AMERICA GMNA earned $521 million in the second quarter of 2001 as production fell 13 percent, wholesale vehicle sales declined 12 percent, and net vehicle prices declined approximately 0.8 percent from the prior-year period. GMNA earned $1.4 billion in the second quarter of 2000 when industry demand was at an all-time high. During the second quarter of 2001, U.S. dealer inventories were reduced to less than 1.1 million vehicles, more than 200,000 units below year-end-2000 levels. In addition, GM outpaced the industry with an 11-percent improvement in quality in the annual J.D. Power and Associates 2001 Initial Quality Study. GM was the highest ranking domestic automaker, with nine vehicles placing among the top three in their categories and three vehicles ranking highest. GM also was recognized during the quarter for substantial improvements in productivity. The recent annual Harbour report cited an 8.5-percent improvement in GM North America's productivity, outperforming all other multi-plant manufacturers. "I am especially pleased that the dedicated work of all our employees to improve quality and manufacturing productivity is being recognized and translated into improved results," Wagoner said. "GM's intense focus on quality is having a very positive effect on our products and customers." GM led all manufacturers in productivity gains in assembly, stamping and engine operations; took the overall lead in transmission productivity for the first time, and had...
