GM's losses in Europe cloud $2bn Q3 profits
Thursday 11 November 2010
Disappointing results from General Motors' European operations, which include the UK car maker Vauxhall, took the shine off the company's latest quarterly results, released yesterday ahead of its planned stock market flotation next week.
GM said its three-month profit of $2bn (£1.24bn) proved it was recovering strongly after its pit stop in bankruptcy protection last year, but its chief executive, Dan Akerson, put the restructuring of the European division on a "to do" list of problems still to be resolved.
"We know we have much more work to do," he told analysts. "We still need to fix Europe. We continue to be vigilant in reducing cost in the enterprise and we've just started doing a better job in marketing our brands to consumers."
The European operations, which also include Opel, posted a $559m loss, their worst quarter this year. Buyers chose lower-margin cars and currency fluctuations hit results. GM decided only late last year that it would hold on to Vauxhall and Opel, rather than sell the division as originally planned.
News of the $2bn bottom-line profit was accompanied by a promise that, although fourth-quarter results would not match that figure, the company remained on course for a profitable year. Revenues are currently 21 per cent ahead of last year, as demand recovers in the US and GM pushes into new markets in China.
Mr Akerson and other executives were in Boston yesterday, drumming up investor interest in what could be a $15bn share sale. The US government, which owns 60 per cent of GM after bailing the the company out during the recession, is among the owners selling down their stakes.
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