GM back in driving seat with profits of $4.7bn
Friday 25 February 2011
General Motors scored its most profitable year since the Nineties in 2010, according to the first annual results since it emerged from a government-sponsored bankruptcy reorganisation.
The company posted a $4.7bn (£2.9bn) profit, after increasing production to 8.7 million vehicles worldwide, in a result that its chief executive said proved that GM could stay in the black even in the toughest economic times.
"Last year was one of foundation-building," said Dan Akerson, the chairman and chief executive officer. "Particularly pleasing was that we demonstrated GM's ability to achieve sustainable profitability near the bottom of the US industry cycle, with four consecutive profitable quarters."
The bankruptcy process, forced by the Obama administration, enabled GM to shed factories, dealerships, brands and billions of dollars in pension liabilities in the US, in return for handing large shareholdings to the government and the United Auto Workers union.
GM's European division, which includes Opel and Vauxhall in the UK, lost $568m in the final three months of 2010, taking its total loss to $1.8bn.
GM shares returned to the stock market last November at $33. For US taxpayers to break even on their $50bn investment in the restructuring, the Treasury must sell its shares at an average of $44, but yesterday they were trading back down 5 per cent at $33.05.
Robert Schulz, debt analyst at Standard & Poor's, said concerns for GM's future progress include the question of whether rival car-makers will increase production to gain market share.
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