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GM announces a profit, its first in several years

U.S. Secretary of Transportation Ray LaHood, left, rides in GM’s EN-V concept car at the SAIC-GM Pavilion at the World Expo site Friday in Shanghai, China. (Associated Press)
Jerry Hirsch Los Angeles Times

LOS ANGELES – After a string of 10 consecutive money-losing quarters, General Motors Co. said Monday that it had earned a profit of $865 million in the first quarter of this year, aided by an improving U.S. economy and a massive restructuring that allowed the business to shed brands, factories and workers.

Sustained profits are seen as crucial for GM’s ability to float a stock offering to repay some of the $52 billion the federal government has poured into the company over the last year. The bailout made the federal government GM’s biggest shareholder, owning 61 percent of the company’s stock.

The first-quarter profit contrasts with a loss of $6 billion in the same period a year earlier. It amounted to earnings of $1.66 a share, compared with a loss of $9.78 a year earlier.

The automaker said its revenue rose 40 percent to $31.5 billion for the quarter.

The results represented a turnaround for a business that almost didn’t survive the recession. The company exited from a bankruptcy reorganization on July 10.

Since last year, GM has sold or closed the Pontiac, Saturn, Saab and Hummer auto brands to focus on its remaining Chevrolet, Buick, Cadillac and GMC lines. It closed four factories and idled two more, and has shed thousands of workers.

“There is no denying that this is a significant turnaround and keeps them on track” for a stock offering, said Rebecca Lindland, auto industry analyst at IHS Global Insight.

Lindland said it looked like GM was working for a stock offering by the end of this year but noted that that would be “aggressive” and depended on factors outside of the automaker’s control, such as the global economy and the health of the stock market.

New models are helping GM to recover from its slump and a bankruptcy reorganization that left the U.S. government as its majority owner. Five new-generation models – Chevrolet’s Equinox and Camaro, the GMC Terrain, Buick LaCrosse and Cadillac SRX – sold in April at a combined rate nearly 300 percent over the vehicles they replaced. Those models accounted for more than 110,000 of the 183,614 vehicles GM sold last month.

Through the first four months of this year, GM sales have risen 14 percent, slightly lagging the industry-wide increase of 16.7 percent.