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Archive for Friday, February 25, 2011

GM has first profitable year since 2004

February 25, 2011

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— In a remarkable financial U-turn, once-bankrupt General Motors recorded its first profitable year since 2004 and is tantalizingly close to reclaiming its title as the world’s No. 1 automaker.

The company faces a bumpy road ahead: Gas prices are rising, GM has only a few new models, and its European operations are still losing money.

Still, the automaker’s $4.7 billion profit for 2010 was impressive, especially considering where it has been. The company lost more than $80 billion in the five years before its bankruptcy and needed a government bailout to survive.

It emerged in the summer of 2009 cleansed of huge debt and costly labor contracts, returned to the stock market in November, and managed to make money even with auto sales near historic lows.

“I’m not sure anyone would have predicted a year ago that GM will deliver net income of $4.7 billion,” Chairman and CEO Dan Akerson said Thursday.

The annual profit, fueled by strong sales in China and the U.S. as the global auto market began to recover, gave GM its best year since 1999, when it made $6 billion at the height of the pickup truck and sport utility vehicle boom.

GM executives predicted the automaker would build on last year’s earnings as sales continue to rise, especially in North America.

With a good performance by GM this year, the U.S. government could recover more of its $49.5 billion bailout, nearly half of which has been repaid. And GM could even retake the title of world’s largest automaker, held by Toyota since 2008.

GM sold 8.39 million cars and trucks worldwide in 2010, coming within 30,000 vehicles of unseating Toyota, which has been wounded by a string of safety recalls, including another big one on Thursday. That 30,000-vehicle difference works out to a little more than a day’s worth of sales for GM.

Comments

cato_the_elder 3 years, 10 months ago

Since GM's stock is now trading below its price at the time of its IPO, someone out there knows a whole lot more about GM's true situation than the author of this lame, one-sided piece.

just_another_bozo_on_this_bus 3 years, 10 months ago

Would you be happier if GM were still on the brink of collapse?

cato_the_elder 3 years, 10 months ago

No, but my next car will be a Ford, thank you.

tomatogrower 3 years, 10 months ago

The drop in stocks is attributed to gas prices. I'm surprised that someone who is as filthy rich as you doesn't understand the market very well.

Flap Doodle 3 years, 10 months ago

Jackie, sweetie, GM and Ford are building the vehicles that people want to buy. If you want to start making 25HP tin can cars to compete with them, knock yourself out.

weeslicket 3 years, 10 months ago

so, if i understand the above commentary, it's a BAD THING that gm is making a profit. profits = bad thing got it.

tomatogrower 3 years, 10 months ago

They think it's bad, because then GM will pay back the nation for bailing it out, and then people will realize it wasn't a bad idea after all. Fewer people lost their jobs, and hopefully they can hire again. Of course the most important people lost their jobs, the incompetent, arrogant "we need a special elevator, so we don't have to deal with underlings" executives who destroyed the company to begin with. Maybe other companies should take a hint. I wonder whatever happened to these jokers. I'm sure their rich buddies found them a plush position somewhere. Hopefully somewhere they won't do so much damage.

just_another_bozo_on_this_bus 3 years, 10 months ago

What's bad is that if it hadn't been bailed out, it could have taken the whole economy down with it, or made the Great Recession truly the second Great Depression.

And what's worse, the idiots who drove it into the ditch are the ones who really got bailed out, but aren't now willing to lift a wealthy little finger to help out while everyone else is expected to cut things to the bone.

sr80 3 years, 10 months ago

i think they GM still owe the government i.e. ( taxpayer) a boat load of cash. i remember GM coming out last year with a big deal about paying us back early,that was a crock.they used money that was borrowed from us to pay us back !!! Woo Wee i'm dizzy !!!!!

weeslicket 3 years, 10 months ago

i believe this is what's known as a repaid loan. (i surely do hope we also collect interest on that loan)

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