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February 16, 2012 in Nation/World
GM records its highest profit ever: $7.6 billion
DETROIT — General Motors earned its largest profit ever in 2011, two years after it nearly collapsed.
Strong sales in the U.S. and China helped the car maker turn a profit of $7.6 billion, beating its old record of $6.7 billion in 1997 during the pickup 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 $49.5 billion government bailout and bankruptcy protection in 2009 to cut its bloated costs. The company earned huge a profit even though U.S. sales of cars and trucks were near an historic low of 12.8 million.
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 the company’s North American performance and are a record for the company.
The government still owns 500 million shares of GM, which it got in exchange for the $49.5 billion bailout. Through earlier stock sales and loan repayments, the government has recouped about $22.3 billion of that money. The remaining shares would have to sell for around $53 each for the government to recoup the rest.
In 2012, GM expects to increase its revenue as global sales grow and it charges more for models.
Its ongoing effort to cut costs and take advantage of its global presence are also paying off. In the fourth quarter, costs fell by $500 million. It saved $100 million by cutting some of the dozens of advertising agencies and media managers it uses. It also saved $100 million by centralizing engineering.
“We will build on these results as we bring more new cars, crossovers and trucks to market,” CEO Daniel Akerson said.
GM’s stock price rose $1.70, or 4 percent, to $26.01 in early afternoon trading.
That’s good news for the U.S. government, which still owns 26.5 percent of the company and needs the stock price to rise significantly before it can recoup all the bailout money. The bailout and GM’s performance already are contentious issues in this year’s presidential campaign.
Still, problems emerged for GM late last year. Its fourth-quarter profit fell 8 percent and missed Wall Street expectations. Europe and South America reported losses. And sales growth in the U.S. slowed even as more Americans bought cars and trucks.
This year, GM expects to make less money per vehicle as the mix of sales shifts to cars from trucks, which have bigger sticker prices
Still, last year was a big success for the company.
Revenue rose 11 percent to $150 billion. Its per-share profit was $4.58. 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.
GM sold 9.03 million cars and trucks around the world in 2011, up 7.6 percent from the year before. That helped it reclaim the title of world’s largest automaker from Toyota Motor Corp.
© Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Stocks plummet as outlook in Europe dims 
Benaround on February 16 at 2:52 p.m.
Obama ignored Bankruptcy Laws to dismiss Stockholders and
Bondholders in bailing-out these clowns. Then he ignored
Bankruptcy law to give about 40% of the future company to
the United Auto Workers employees. The employees said
it is not in our DNA to ever support our employer…so they
sold their ownership share to the gullible public.
G.M. made a lot of money because the money they owed
suppliers was not paid. They stiffed people who were stupid
enough to give them credit…and hence improved their
bottom line.
Yea, …Chevy Runs Deep… (From the people they owe money)
Watch the Democrats torch my comments…it’ll be entertaining.
valleyman on February 16 at 3:00 p.m.
Good… Now they can return ALL OF THE MONEY They TOOK as a BAILOUT from my tax dollars!
meadman on February 16 at 3:10 p.m.
so this good news and the hundreds of thousands of jobs saved in the midwest and the 24 straight months of private sector job growth and the stock market about to hit 13,000 are certainly evidence of the “failed Obama administration policies” aren’t they???? The GOP has nothin’ to offer but doom gloom and never-ending stupidity dealing with gays, marriage, abortion, contraception, etc. etc. etc. No real ideas, no economic plans, no ideas to do anything except try to control woman and their rights. I encourage them in all this – it helps ensure another 4 years of sound leadership from Pres. Obama
valleyman on February 16 at 3:17 p.m.
@meadman: So do WE GET OUR MONEY BACK?
You also conveniently ignore the hundreds of thousands of Americans who have stopped looking for work (falling off the job tracking), you ignore the fact that the stock market was already above 13000 before Obama took office, you trot out “hundreds of thousands of jobs saved” but can’t point to one figure to PROVE that just like the administration can’t. I mean, heck, you could say Obama has “saved” every job in America, and there is no way to refute that… We all know what comes out of the Southbound end of a Northbound camel still smells an awful lots like this “positive” news though…
Benaround on February 16 at 3:39 p.m.
Meadman:
These are Wonderful Obama Boom-Times ?
Who you going to believe…MSNBC…or your LYING WALLET ?
RedCedar on February 16 at 3:45 p.m.
Lots of big old companies could succeed wonderfully if they were allowed eliminate all their shareholders’ equity, most of their liability to their bond-holders, and most of their legacy pension obligations. Ford, on the other hand, didn’t need the very special treatment because Mr. Mulally had been smart enough to see the financial storm coming and line up sufficient credit ahead of time. Ford’s reward for being so responsible and proactive was to see both of their less-wise competitors get very special treatment from the government so they could come back stronger than ever.
I don’t buy the argument that bailing out GM and Chrysler was necessary to save American jobs. Americans will buy the same number of cars every year no matter who is making them. When someone decides they want and can afford a new car, they go out, see what’s available, and pick one. Most of them, even the “import” brands, are about an equal mix of foreign and domestic-made parts these days. A GM car doesn’t represent any more American jobs than a Toyota does. So the question wasn’t about the number of jobs, per se, it was about which well-connected businessmen and union bosses have the government’s ear.
As always, size matters. If GM and Chrysler had gone bust without government intervention, they may or may not have emerged from bankruptcy in some form. The airlines seem to have all been bankrupt forever, and yet they keep flying. On the other hand, a startup car company like Tesla Motors might have become one of the “Big Three” by now.
johnclarke on February 16 at 4:00 p.m.
Um, you guys do know that George Bush authorized $17.4 billion for GM and Chrysler right? You are also aware that Congress tried to block him so Bush used TARP to go around them, right?
I’m not saying anything after that was “right” but let’s not forget where GM’s bailouts (and all the bailouts) started life. That’s right, in the land of the “free market economy”. I can tell you what was free ha ha. Our tax dollars.
Benaround on February 16 at 4:02 p.m.
RedCedar:
You stated the issue correctly…but to go a little further, GM
and Chrysler can now “afford” to offer huge discounts and
zero % finance because they skipped- out on their creditors.
Ford’s reward for being honest and ethical is to suffer a
sales disadvantage by a subsidized Government Mooch.
I truly would love Democrats to buy Chevy Volts @ 45K
and get their 32 mile range with these coal-burning (electric)
fire-hazards.
MatthewRoot on February 16 at 4:24 p.m.
valleyman, the Dow Jones was about 8,280 when President Obama took office, so don’t ignore that.
Benaround, electric cars can be powered by wind-generated electricity if you choose. Just buy wind-generated power. Chevy volts are less of a fire hazard than gasoline-powered vehicles (and the batteries are now redesigned to withstand a side-impact collision). I am considering purchasing a Volt (and my home is powered by wind).
huskerinwa on February 16 at 4:25 p.m.
GM is alive & Osama is dead. OBAMA2012
drywitt99 on February 16 at 4:29 p.m.
@valleyman
We (the American people) own a large block of stock in an industry leader reporting its most PROFITABLE YEAR EVER!
I think there’s a “pretty good chance” we’ll get our money back!
Also…
“The Center for Automotive Research, a Michigan think tank, estimates that the bailout will save 1,500,000 jobs
”
jobs.”http://money.cnn.com/2012/02/14/news/economy/romney_gm/index.htm
And….THAT’S WHAT PISSES YOU ‘BAGGERS OFF!
dataxman on February 16 at 4:37 p.m.
and how much income tax will GM pay on those billions? That’s right - zero! Thanks to Obama, GM will be able to earn $45.4 BILLION before they have to pay a dime in Federal Income tax. Not a bad gift from Uncle Sugar
and people have the audacity to complain about Romney only paying 15%…
QueenofSanDiego on February 16 at 4:45 p.m.
You are absolutely correct Benaround. Too many people have short memories. The bond holders got stiffed in an unprecedented and shocking stunt. The fact that ANYONE in that company is getting a BONUS before every penny is paid back and the bond holders restored is outrageous. I will never buy a GM car as long as I live.
jddavis on February 16 at 4:53 p.m.
I am so tired of “Big Auto” taking government money and making billions in profit! They don’t pay their share of taxes, and are getting rich on the backs of the middle-class. Outsourced parts suppliers use foreign labor (probably children) that take jobs away from us here at home.
Seriously, I am glad GM is turning a healthy profit during this economy. It is definitely good news!
Dazzeetrader11 on February 16 at 5:08 p.m.
Obama didn’t save anyone except the United Auto WOrkers. GM should have a profit…taxpayers paid for all of their overhead and THEN Obaama bought their crappy cars. 700 Volts sold??? Yikes.
Libs grow up…it’s a failure. GM should have gone through CH 11 and reorganized….like normal companies do. Obama needed the unions…and he had YOU pay for them.
Throw this community organizer bum out.
Jeeeeeeeeez anyone canmake money without overhead… Shhheeeeeeeesh…
Diana on February 16 at 5:28 p.m.
Bush bailed out GM in December 2008. $17.6 billion profit in 2012.
B-b-but, Obama!
jdspokanewa on February 16 at 5:48 p.m.
So these shareholders, bond owners and suppliers would have been paid exactly how much if GM went under?
It’s always something with some of you guys. Obama could eliminate the debt, eliminate taxes and you guys would still find something to piss and moan about.
jdspokanewa on February 16 at 5:52 p.m.
Dazzee, UAW went to the table to help the company. Using unions as the GOP example of evil is getting really old, come up with something you haven’t been pounded with from Fox news.
dataxman on February 16 at 5:59 p.m.
JDS - the shareholders were wiped-out in the bankruptcy - Obama didn’t do anything that helped them. The ones who got jacked-up by Obama were the bond holders.
The Unions made billions - if not tens of billions - off the Obama Administration ‘tweaking’ the bankruptcy rules and then having the IRS (also controlled by Obama) issue a favorable rule that will allow GM to pay a income tax rate less than Buffett’s Secretary…
JBlim on February 16 at 6:13 p.m.
Here we go again with Dazee making disingenuous statements:
Dazee says: “700 Volts sold???”
Uh, no Dazee, I corrected you once before.
Reality:
” .. Last year, GM sold 7,671 Volts . . “
http://green.autoblog.com/2012/02/08/gm-looks-to-spur-chevy-volt-sales-with-california-leasing-incent/
Why would anyone listen to ANYTHING you have to say?
Dazee:
“It’s false as OBama saying GM is a shining example. GM sold 650 VOlts all year. It’s disaster. “
http://www.spokesman.com/stories/2012/feb/04/us-jobless-rate-drops-for-fifth-straight-month/
Well, GM records its highest profit ever: $7.6 billion. Sounds pretty good to me. GM’s stock was up 9% today, people putting their money where their mouths are buying GM. No, not a big conspiracy. Dazee can’t handle the truth, in denial. Get used to saying ‘President Obama’ for another 4 years. All your bankrupt austerity economic philosophy has ever done is put people out of work. Step aside and let the grown-ups handle it.
Benaround on February 16 at 6:48 p.m.
Let the grown-ups handle it ?
Electric Sports-Cars for Hollywood…Free guns for drug dealers… …Sky high poverty and suicide rates…inner city schools that
are child abuse…kickbacks to political donors…class warfare
and over a Billion a day in debt service. Four more years of
your Messiah won’t happen.
misjustice on February 16 at 8:26 p.m.
” Four more years of
your Messiah won’t happen.”
Well, who’s gonna stop it from happening? Mitt Robme? Newt Getrich? Don’t Google it Sanitorium? Ayn Paul?
REALLY?
If it makes ya feel better, put it in biblical terms; welcome to the “second coming” (of the Messiah)!
4 MORE YEARS!!!!
; )
D Statler on February 16 at 8:35 p.m.
CHEVY ROCKS ! FORD keeps rollin! screw the imports! Just keep buyin American whenever possible. Quality is job 1@ AMERICA!
It is hard to see anyone offered by republicans that are better leaders than Obama besides maybe Ron Paul. It looks like another election of voting for the lesser of two evils again. This two party system sucks pond water :^(
Mayocynic1 on February 16 at 10:11 p.m.
http://hotair.com/archives/2011/12/21/govt-subsidies-for-chevy-volt-up-to-250000-per-car/
Good bargain those Volts!!
Obama builds a market and then uses it….and then calls it a victory.
Biggest VOLT user? Who else …the US government.
In the public domain, the income of the average Volt buyer is making $185,000 annually. You need a big salary to afford one…and even then the Volt reliability is just terrible. Sounds about right for the Obama unions.
jdspokanewa on February 16 at 10:15 p.m.
Dataxman, that was my point. If GM went under, those people and entities would have gotten nothing anyway, but I guess blaming Obama for saving those horrible union jobs is easier?
jddavis on February 17 at 1:29 a.m.
Production cost for a Volt is about $38K. Each Volt produced/sold cost the US Taxpayers roughly $10K.
Nice work Obumble.
JBlim on February 17 at 5:51 a.m.
No each Volt doesn’t cost the taxpayer anything. Those are phony numbers put together by right-wingers using fuzzy math.
dataxman on February 17 at 6:49 a.m.
jds - so if a business is about to fail taxpayers need to rush in and make all the creditors whole? That is great news.
JBlim - each Volt comes with a $7500 rebate - Obama wants to raise that to $10,000.
JBlim on February 17 at 6:57 a.m.
dataxman
As do all electric cars, not just Volts. We don’t have to spend trillions of tax dollars protecting oil fields in the Middle East to fuel an electric car.
Benaround on February 17 at 7:29 a.m.
Coal-Burning (Electric) Cars for Hollywood…Zero taxes for
GM (UAW pals)…no taxes for General Electric (Thanks
NBC and MSNBC for your free support)…
What can I do for you today…make your house payment on the house you couldn’t flip ? …
No wonder Democrats are heading for a November disaster.
MatthewRoot on February 17 at 9:04 a.m.
Benaround, are you suggesting that we build more wind turbines and solar power plants, and convert all of the coal-fired plants to natural gas?
jdspokanewa on February 17 at 10:31 a.m.
You’ve obviously missed my point entirely which doesn’t surprise me. I’m stating that those on this topic who are crying because investors and bond holders lost their butts have nothing to cry about because those would have been worthless had GM failed anyway.
jddavis on February 17 at 10:57 a.m.
Jblim—here are a couple articles to help you through the “fuzzy” math. If government tax credits/incentives to GM and its suppliers do not cost the taxpayers, who is paying for them?
http://news.investors.com/Article/601207/201202141851/obama-administration-raises-chevy-volt-subsidy-.htm
“Martin added that the Mackinac Center’s math was “simple and selective.” However, he offered no data or specifics to support his assertion.
“This is a matter of simple math,” said Hohman. “I added the known state and federal incentives that have been offered and divided by the number of Volts sold. If GM has additional information to add to the public data on the use of taxpayer money, I look forward to seeing it.”
http://www.michigancapitolconfidential.com/16192
Benaround on February 17 at 11:23 a.m.
MatthewRoot:
Wind turbines and solar are fine to try to develop without
huge subsidies…but so far they are not cost-worthy and
their power doesn’t transport very well. Natural gas is an
excellent alternative to coal…its cheap-plentiful and we have
huge reserves. It’s only impractical to the extent that greenies
would prefer to curse the darkness than purchase an
abundant product from the”icky” petroleum companies.
If the coal can’t be burned cleaner, it needs to be shut down
until it can burn cleaner.. Nuclear is great…but again the
greenies allow “Icky” to cancel science and common sense.
Finally, thank you for your polite and worthy query to my
thought on subject…really.
The_Seer on February 17 at 11:31 a.m.
There are less people in the U.S. workforce today than in 2001.
Profit this!
The_Seer on February 17 at 11:32 a.m.
My Subaru was built in Tennessee!
Benaround on February 17 at 1:50 p.m.
Seer:
Your Subaru is fine car…but the profit for it’s sale climbed
on a Boeing and went to Toyko for the rest of it’s life.
I prefer a Natural Gas powered Ford. All American including
the fuel…plus I have the benefit of annoying Obama.
Honda also offers Natural Gas power but as with Ford
you have to go to underground economy for fill equipment.
DHF on February 17 at 7:34 p.m.
Wait till the gas gets up around 4to5 dollars a gallon as some project. Then we will see how many cars they sell. This might be the end of there record profits.
misjustice on February 17 at 7:49 p.m.
^ actually, they may sell more cars when gas does top $5/gallon; at least more of the fuel efficient ones. There are lots of people that have been putting off getting a new car, higher gas prices may be the motivating factor in deciding that NOW is the time.
Or not…
gotcha on February 18 at 5:34 a.m.
GM & Chrysler were both fortune 500 companys in the 50’s and 60’s. Fast foward to 2008 both companys were close to being bankrupt. Why ? Unions… The companys that provided hundreds of thousands of jobs to Americans end up bankrupt because of greedy Unions. Even today GM has a 128 Billion dollar pension lialibility. Both companys were very fortunate they were able to elect a UNION BOUGHT PRESIDENT to bail their azzes out. They should have gone under.
JBlim on February 18 at 1:01 p.m.
jddavis say ““This is a matter of simple math,” said Hohman. “I added the known state and federal incentives that have been offered and divided by the number of Volts sold. ”
No, a tax incentive is not a cost, the government didn’t have pay anything. Besides, I thought you right-wingers wanted lower taxes. Are you saying you want higher costs (your tax cuts) for the government?
jddavis on February 18 at 7:31 p.m.
JBlim—that is a quote from the reference, not my words.
So, you are in agreement that when the govt takes in less revenue via taxes, it is not a cost?
What about the $7500 credit Obumbler wants to increase to $10000? Cost or no cost to the taxpayer?
JBlim on February 19 at 6:04 a.m.
No we are not in agreement, you think a tax credit is a cost and I don’t. When the government takes in less revenue via taxes, that’s called taking in less revenue via taxes.
jddavis on February 19 at 5:00 p.m.
JBlim—I think a refundable credit is a cost. I’m with you, taking in lower revenue (taxes) is not a cost.
drywitt99 on February 19 at 5:28 p.m.
@gotcha
No unions in the ‘50s????
Just wonderin’????
JBlim on February 19 at 5:34 p.m.
jddavis says: “I think a refundable credit is a cost.”
Refundable credit? No, you buy the car, then you get a credit when you file your taxes. That is not a cost to the government, it’s less revenue collected.
jddavis on February 19 at 7:47 p.m.
JBlim—some of your tax credits are refundable, some are not. I understand completely the credit occurs when you file your income taxes. If your tax liability is $5000, and you paid $0 during the year, a $7500 refundable tax credit will get you a $2500 tax refund. Thus, the govt is paying you $2500 for buying the car. $7500 credit - $5000 liability = $2500.
So yeah, it costs the taxpayers.
JBlim on February 19 at 8:50 p.m.
I doubt that it does overall. Maybe a few people who buy Volts owe less than $2500 in federal taxes, but that’s not typical. So no, it doesn’t cost the taxpayers anything.