GM Records Its Highest Profit Ever: $7.6 Billion

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GM records its highest profit ever: $7.6 billionDETROIT (AP) - General Motors (GM) earned its largest profit ever in 2011, two years after it nearly collapsed into financial ruin.

Strong sales in the U.S. and China helped the 103-year-old carmaker turn a profit of $7.6 billion, beating its old record of $6.7 billion in 1997 during the pickup truck and SUV boom.

GM is a vastly different company than it was back then. It's smaller, has less debt and its contract with the United Auto Workers is less costly. But it took a government bailout and a trip through bankruptcy protection in 2009 to cut its bloated costs. The company made record money last year even though U.S. auto sales were near historic lows at 12.8 million cars and trucks.

But problems surfaced in its 2011 results. GM lost $747 million before taxes in Europe, and its South American operations lost $122 million. Sales growth slowed in the U.S. in the fourth quarter, even as more Americans bought cars and trucks.

Also, GM's fourth-quarter profit fell 8 percent and results missed Wall Street expectations.

GM's stock price fell 8 cents, or 0.3 percent, to $24.85 in premarket trading.

The U.S. government still owns 26.5 percent of the company and is waiting for the share price to rise before selling in an effort to recoup the bailout money.

Last year, GM made the bulk of its income in North America, where its pretax profit totaled $7.2 billion. International Operations, which includes Asia, made $1.9 billion before taxes, but that was down.

During the year, GM's global sales rose 7.6 percent to 9.03 million vehicles to help it reclaim the title of world's largest automaker from Toyota Motor Corp.

"We will build on these results as we bring more new cars, crossovers and trucks to market," CEO Daniel Akerson said.

This year, GM expects to increase its revenue as global auto sales grow and it charges more for models. However, it will make less money per vehicle as the mix of sales continues to shift to cars from trucks, which have bigger sticker prices. It also expects to invest $8 billion on new products and technology, and says pension expenses will rise. The company wants to keep expenses down by freezing its underfunded U.S. pension plan for salaried workers.

Chief Financial Officer Dan Ammann said the company's restructuring in Europe cut pretax losses by more than $1 billion from 2010, but it didn't go far enough.

He hinted that GM will have to cut factories and jobs in the region, saying the whole auto industry has too many factories there.

"We clearly have work to do in Europe, we have work to do with the South American business," he said.

The 2011 profit of $4.58 per share was 62 percent higher than a year earlier. Full-year revenue rose 11 percent to $150 billion.

GM said 47,500 blue-collar workers in the U.S. will get $7,000 profit-sharing checks in March. The checks are based on North American performance and are a record for the company.

The company has placed Vice Chairman Steve Girsky in charge of the European management board and is adding executives in preparation for restructuring. Factory closures and layoffs are likely but could provoke a fight with powerful labor unions.

Girsky has said GM intends to fix the European unit, made up of the Opel and Vauxhall brands, and keep it in the company. GM came close to selling the unit in 2009.


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TOM BENNINGTON

I'M GLAD THEY ARE MAKING MONEY AGAIN, BUT AS A GM BOND HOLDER I'M STILL WAITING TO GET SOME OF MY FUNDS BACK. PROBABLY NEVER WILL, BUT I CAN HOPE SOMEDAY I WILL.

February 21 2012 at 7:39 AM Report abuse rate up rate down Reply
brivecat

I drove my brother's Subaru, to pick him and his family up at the airport. My impression - nothing really bad, nor anything really great about it. Maybe if I was driving in snow I would have been impressed with it's handling of snowy or icy roads. But on a clear highway, my impression of the car was, "nah, I don't quite get what it is about these things that every ooh and ahs about, goes gaga over, it's not happen." The rock hard, plastic sterring wheel was pretty lame. I had an non fancy Chevy with a much softer, more suptle steering wheel than the one in his supposedly awesome Subaru. My brother also had to get the ski and gear carrying case for the top of his car, you know the ones made by Thule, that Swedish company even though I'm sure these carrying cases are made in China. In other words, he has the Subaru, the Thule case, and not he is just going to be so hip when he drive up to the ski mountain. I have to completely agree with my other brother, who said, regarding our Subaru brother, "They totally got him, hook, line and sinker." Or something to this effect, in other words, our one brother was one of these people who tatally goes for all the brainwashing about what you have to have in order to be cool and hip... he drives the Subaru, has the ski rack thing, wears his Northface jacket. And unfortunately, this could describe 75% percent of the population where I live. Non of these idiots are being unique, they are all totally conforming, they are about as conformist as one can get. I'm sorry, I don't need to drive some car from Nissan, Subaru or Honda. I'd sell any of these fast as possible and buy a Ford or GM vehicle. I have absolutely no desire to drive a Toyota, none what so ever. It's the last thing I'd ever want. I am a liberal, but being liberal does not mean that I have to conform to all the cool people's conformist, ignorant, shallow ideas.

February 21 2012 at 2:47 AM Report abuse rate up rate down Reply
brivecat

I drove my brother's Subaru, to pick him and his family up at the airport. My impression - nothing really bad, nor anything really great about it. Maybe if I was driving in snow I would have been impressed with it's handling of snowy or icy roads. But on a clear highway, my impression of the car was, "nah, I don't quite get what it is about these things that every ooh and ahs about, goes gaga over, it's not happen." The rock hard, plastic sterring wheel was pretty lame. I had an non fancy Chevy with a much softer, more suptle steering wheel than the one in his supposedly awesome Subaru. My brother also had to get the ski and gear carrying case for the top of his car, you know the ones made by Thule, that Swedish company even though I'm sure these carrying cases are made in China. In other words, he has the Subaru, the Thule case, and not he is just going to be so hip when he drive up to the ski mountain. I have to completely agree with my other brother, who said, regarding our Subaru brother, "They totally got him, hook, line and sinker." Or something to this effect, in other words, our one brother was one of these people who tatally goes for all the brainwashing about what you have to have in order to be cool and hip... he drives the Subaru, has the ski rack thing, wears his Northface jacket. And unfortunately, this could describe 75% percent of the population where I live. Non of these idiots are being unique, they are all totally conforming, they are about as conformist as one can get. I'm sorry, I don't need to drive some car from Nissan, Subaru or Honda. I'd sell any of these fast as possible and buy a Ford or GM vehicle. I have absolutely no desire to drive a Toyota, none what so ever. It's the last thing I'd ever want. I am a liberal, but being liberal does not mean that I have to conform to all the cool people's conformist, ignorant, shallow ideas.

February 21 2012 at 2:47 AM Report abuse rate up rate down Reply
TOM BENNINGTON

I'M GLAD THEY ARE MAKING MONEY AGAIN, BUT AS A GM BOND HOLDER I'M STILL WAITING TO GET SOME OF MY FUNDS BACK. PROBABLY NEVER WILL, BUT I CAN HOPE SOMEDAY I WILL.

February 20 2012 at 8:18 PM Report abuse rate up rate down Reply
Kevin

Why are there some many misinformed people allowed to talk so much crap about something they have no clue about?? GM has paid back all the loan they were given. The rest of the loan is in stock that the Government owns!!!! The Government is waiting for the stock to hit a price where they will get the most for their money. GM owes the GOVT nothing !!!! Once the Government decided to sell their stock then they will be fully repaid .. Please know what you are talking about before you post and sound like an idiot !!!

February 20 2012 at 12:54 PM Report abuse rate up rate down Reply
Frankie

Hey republicans...go B L O W.

February 20 2012 at 12:42 AM Report abuse rate up rate down Reply
mike edwards

instead of giving bonusas why not pay back the 50 billion loan to the tax payers of this country what the hell is going on

February 19 2012 at 7:55 AM Report abuse -1 rate up rate down Reply
Greg

We all KNOW that no one is held accountable for their debts. Americans walk away from mortgages every day, and GM will never pay back the "debt."

What's the big deal? When is not paying back what you owe news?

February 19 2012 at 12:39 AM Report abuse +1 rate up rate down Reply
kv37

I seriously doubt that they earned it. More likely some very creative accounting. GM was always good at making things up.

February 17 2012 at 1:53 PM Report abuse -2 rate up rate down Reply
renaldo1949

i have a question for those of you who think gm should immediately payback the taxpayers, which by the way, we have technicly been payed back. there is still the matter of the 26% of gm stock. that is not a loan.

here's my question: for those of you who pay cash for everything, skip this. for those of you that don't, which is most of us read on.


did you borrow to buy your house? did you then over time ever borrow to buy a car? do you have credit card debt?

if you have done any of these things, before budgeting all discrestionary money to debt; spend money on unnecessary things. if you spent more money before paying off debt, you are a hypocrite.

February 17 2012 at 10:52 AM Report abuse -2 rate up rate down Reply
1 reply to renaldo1949's comment
democracks0

OBAMAS A HYPOCRITE

February 17 2012 at 8:18 PM Report abuse rate up rate down Reply