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GM Records Its Highest Profit Ever

JBS

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This is why Companies go BK :thumbsdown

It is really BS :grumble:





GM Records Its Highest Profit Ever


Thu, 02/16/2012 - 9:19am

by
Tom Krisher, AP Auto Writer



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DETROIT (AP) -- General Motors 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 latest results. GM lost $700 million before taxes in Europe, and its South American operations lost $100 million. Sales growth slowed in the U.S. in the fourth quarter, even as more Americans bought cars and trucks.

GM's stock price fell 43 cents, or 1.7 percent, to $24.50 in pre-market 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.

The company wants to keep expenses down by freezing its underfunded U.S. pension plan, and it hinted at factory and job cuts to restore profitability in Europe.

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.

But GM's fourth-quarter profit fell 8 percent to $468 million, or 28 cents per share. Revenue rose 3 percent to $38 billion. Before one-time items that totaled 21 cents, GM earned 40 cents per share.

Analysts expected earnings of 42 cents on revenue of $37.9 billion.

GM also said Thursday that its 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.
 

Tom Brown

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How is this not a positive story?

Corporate profits are breaking records. They are screwing the worker's pension plan and they are talking about layoffs. It's a Republican's wet dream.
 

460

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Gm has one person and one person only to thank.

President Obama!!!!!!!!!
 

Vmjtc3

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Gm has one person and one person only to thank.

President Obama!!!!!!!!!

Post of the year right here...... oh snap were not on the comedy central forums, my bad:D
 

OCMerrill

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It's not a 103 years old. More like 2 1/2 years old.
 

Guest

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How is this not a positive story?

Corporate profits are breaking records. They are screwing the worker's pension plan and they are talking about layoffs. It's a Republican's wet dream.

The feel good story of the year!

:p
 

Tom Brown

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Post of the year right here...... oh snap were not on the comedy central forums, my bad:D

lol! :D

Those comedy central forums are so blindly Democrat, with the odd total kook, that it is about as opposite of this place as you can get. During the 2008 election cycle, I had them so jacked up with the Kenyan terrorist shtick, I have zero doubt a few of the most narrow minded members would physically hurt me if they ever met me.

In that regard, it's exactly the same as this place. With that move, I have single handedly bridged the partisan gap! :D :thumbsup
 

460

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Post of the year right here...... oh snap were not on the comedy central forums, my bad:D

Calling it like I see it.

You and everyone else knows its true. Gm would have fallen on its face if it wasn't for the bail out they received.

On a side note, ford posted some pretty good numbers too with out bail out money.
 

cxr

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Calling it like I see it.

You and everyone else knows its true. Gm would have fallen on its face if it wasn't for the bail out they received.

On a side note, ford posted some pretty good numbers too with out bail out money.

Soo what happens when gas hits > 5.00 a gallon. they have not changed their model of buildings SUVs much.

will he bail them out again or do they have enough cash on hand now to withstand another downturn?
 

Tom Brown

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Soo what happens when gas hits > 5.00 a gallon. they have not changed their model of buildings SUVs much.

will he bail them out again or do they have enough cash on hand now to withstand another downturn?

Let me see if I understand your position.... the bailout was a success, GM earned a record profit, and you're mad as hell?

Cheer up. I'm sure somewhere there is a fire in an orphanage that will asphyxiate all occupants.
 

pronstar

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I'd be in great financial shape, too, if I simply walked away from all of my debts :thumbsup
 

ChumpChange

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Here's my favorite part of the article:

DETROIT (AP) -- General Motors earned its largest profit ever in 2011, two years after it nearly collapsed into financial ruin.

Nearly Collaplsed? I'd say BK isn't nearly financial ruin....it IS financial ruin!
 

JBS

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Here's my favorite part of the article:



Nearly Collaplsed? I'd say BK isn't nearly financial ruin....it IS financial ruin!

That is a backwards way to think ;):D

Just kidding. Does not take a financial genius to run a business keeping all your assets and shedding your debt.

It is a real joke :thumbsdown
 

pronstar

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Here's my favorite part of the article:



Nearly Collaplsed? I'd say BK isn't nearly financial ruin....it IS financial ruin!

That doesn't count...they took a Mulligan.

2849108_orig.jpg
 

28Eliminator

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My response to GM:

"Your welcome. give me a truck and we'll call it even" :D
 

2Driver

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Nothing a normal Chap 11 reorganization wouldn't have done better and with more accountablitly.

The loan is not paid back contrary to belief.
What was, is not accounted for and was spent under the table, putting the USA further in debt.
BO set his priorities for what needed to take place like the VOLT, Union favors etc.

It not like it's the same old GM just now profitable, they shed a lot of jobs, divisions, suppliers and off'd a lot of IOU's under the Obama "plan".
 

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Racey

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GM earns record profit today, GM stockholders from 2.5 years ago are stuck holding their dicks to the tune of billions as their shares evaporated into thin air, zero cents on the dollar.
 

RLJ676

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Nothing a normal Chap 11 reorganization wouldn't have done better and with more accountablitly.

The loan is not paid back contrary to belief.
What was, is not accounted for and was spent under the table, putting the USA further in debt.
BO set his priorities for what needed to take place like the VOLT, Union favors etc.

It not like it's the same old GM just now profitable, they shed a lot of jobs, divisions, suppliers and off'd a lot of IOU's under the Obama "plan".

What? The loan is paid in full. The rest is equity, ie stock. The volt was in the plans long before BO was in office, Bush started the rescue, and stock going to the unions for VEBA was pre- BO as well. Any other nonsense that Limbaugh blathers on about we should clarify?

Record profits, smaller bonuses than last year for white collar folks......but at least the hourly guys take home a big bonus....:rolleyes:

Oh, and for the business genius's that claim it's simply from "walking away from debt" just how much debt would there have to been for the servicing cost to have been 7.6 B? Yep, nothing to do with better products with higher transaction prices and increased volume, along with running the business more efficiently.
 

bphillman

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Calling it like I see it.

You and everyone else knows its true. Gm would have fallen on its face if it wasn't for the bail out they received.

On a side note, ford posted some pretty good numbers too with out bail out money.

You realize all the record profits come from screwing all the vendors and pention holders they left holding the bag, right? I mean if I extended a company credit to make muffler bearings and they BK, then post "Record Profits" I guess I'm more than a bit jaded to that.. But then again I'm a small business owner that has had company after company do exactly that to me for the last 3 years.... No Obama bailout for me! But then again I think of the bright side... Look at all the weight I lost with my pockets being so empty! :swear
 

bphillman

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BTW, I am not an Obama hater.. Though I am not a Democrat either. I think the guy was handed a pile of crap and has done the best he could. But I'm not going to sit idle and listen to the supposed success stories without any reflection on the circumstances and carnage in its wake.
 

JBS

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BTW, I am not an Obama hater.. Though I am not a Democrat either. I think the guy was handed a pile of crap and has done the best he could. But I'm not going to sit idle and listen to the supposed success stories without any reflection on the circumstances and carnage in its wake.

Well you had a good but short run here:D
 

pronstar

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Oh, and for the business genius's that claim it's simply from "walking away from debt" just how much debt would there have to been for the servicing cost to have been 7.6 B?

That has nothing to do with the fact that their current financial footing, and their very existence, is entirely due to the BK, and walking away from their debt.

It's not making a value judgement, it is what it is.
They got a clean-slate do-over.
 

460

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BTW, I am not an Obama hater.. Though I am not a Democrat either. I think the guy was handed a pile of crap and has done the best he could. But I'm not going to sit idle and listen to the supposed success stories without any reflection on the circumstances and carnage in its wake.

Your on good in my book now.

Can you give me one Obama in 2012.

Hooooray
 

bphillman

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Well you had a good but short run here:D

Damn I'm making friends EVERYWHERE today!

Heres my honest opinion on the subject... If the philosopy is "Take from the rich, give to the poor"... what about the rest of us? I'm lost somewhere :blah:
 

bphillman

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Damn I'm making friends EVERYWHERE today!

Heres my honest opinion on the subject... If the philosopy is "Take from the rich, give to the poor"... what about the rest of us? I'm lost somewhere :blah:

Screw it.. No matter what I wont starve!!

now lets go OCCUPY something!
 

River911

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I'm gonna get some shit for this, but whats a little more...

I'm glad GM got bailed out. Yeah, I said it. And I hate Chevy's.

But I hate Asian car companies taking our US dollars even worse.

However. If they are making money now, they need to repay their debt and do something to make their old shareholders whole.

A USA without Chevy's, Ford's and Dodge's just wouldn't be American.

But they better keep their asses in line. No more screw ups. This is the last do-over.

Carry on :D
 

plaster dave

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I'm gonna get some shit for this, but whats a little more...

I'm glad GM got bailed out. Yeah, I said it. And I hate Chevy's.

But I hate Asian car companies taking our US dollars even worse.

However. If they are making money now, they need to repay their debt and do something to make their old shareholders whole.

A USA without Chevy's, Ford's and Dodge's just wouldn't be American.

But they better keep their asses in line. No more screw ups. This is the last do-over.

Carry on :D

I agree. Pay back all that lost money.
 

pronstar

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A USA without Chevy's, Ford's and Dodge's just wouldn't be American.


You do realize that FIAT - and Italian company - owns Dodge, right?

That's like saying America wouldn't be the same without gelato and canoli.
 

ChumpChange

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I'm glad they reported the profit they did as not only did their stock go up but my Ford stock went up as well. :D
 

JBS

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I'm gonna get some shit for this, but whats a little more...

I'm glad GM got bailed out. Yeah, I said it. And I hate Chevy's.

But I hate Asian car companies taking our US dollars even worse.

However. If they are making money now, they need to repay their debt and do something to make their old shareholders whole.

A USA without Chevy's, Ford's and Dodge's just wouldn't be American.

But they better keep their asses in line. No more screw ups. This is the last do-over.

Carry on :D

I agree. Pay back all that lost money.

Never going to happen. May even be illegal

Current shareholders would impeach the board
 

RLJ676

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You realize all the record profits come from screwing all the vendors and pention holders they left holding the bag, right? I mean if I extended a company credit to make muffler bearings and they BK, then post "Record Profits" I guess I'm more than a bit jaded to that.. But then again I'm a small business owner that has had company after company do exactly that to me for the last 3 years.... No Obama bailout for me! But then again I think of the bright side... Look at all the weight I lost with my pockets being so empty! :swear

Vendors were not screwed. Nearly every single one, production suppliers in particular, were paid and on time or even early to keep production going. This I know for a fact first hand.

Pensioners took a haircut for sure, but otherwise they would have lost more.

In the end, everyone took a loss, either in wages, jobs, etc. Stock holders lost their money, that's what happens in a bankruptcy unfortunately. It is risk/return, if you don't understand that, don't buy stock. Bondholders lost money too, but not all of it, and they were not secured bonds and they had a big return on them until the bankruptcy, again a risk/return situation. You are not "owed" shit if you invest in a company as a stock holder, and it goes under. The gov't financing the bankruptcy has absolutely nothing to do with that, so their options were the company liquidates and they get nothing, or goes bankrupt they get nothing. In the case of a liquidation and collapse a huge portion of the economy likely goes with it.......making the already miserable depression that much worse. So how exactly did they get screwed other than their investment failed? Does every company in my portfolio owe me the shitloads I've lost in them over the years as the economy tanked now?
 

RLJ676

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That has nothing to do with the fact that their current financial footing, and their very existence, is entirely due to the BK, and walking away from their debt.

It's not making a value judgement, it is what it is.
They got a clean-slate do-over.

Right, GM's existence is due to it, and the balance sheet got cleaned up, but that doesn't mean that the profit is because of walking away from debt. The debt has a cost, the cost would be what ate into the profit. So how much GM debt would there be and at what cost to offset the 7.6 Billion? GM is doing a hell of a lot more than just "walking away from debt" to get where we are.
 

pronstar

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Right, GM's existence is due to it, and the balance sheet got cleaned up, but that doesn't mean that the profit is because of walking away from debt. The debt has a cost, the cost would be what ate into the profit. So how much GM debt would there be and at what cost to offset the 7.6 Billion? GM is doing a hell of a lot more than just "walking away from debt" to get where we are.

You guys took a Mulligan and are making the most of it.
I don't think anyone is saying you emerged from BK and sat around doing the exact same things you were doing pre-BK.

The old GM had tons of income, but debt servicing and pension obligations ate away at every dollar you made, to the extent that you were a financial services company that lost money making cars. And that put a huge crimp on new-product development.

The products developed under, and produced by, the New GM are vastly superior to the older products. And from what I can gather, your income is far beyond what was coming-in pre-BK.

But when headlines read "GM posts record profits" post-BK, and people are scraping by trying to get loan mods/re-fi's on their homes, you can't expect everyone to be giddy about it.
 

Tom Brown

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Vendors were not screwed. Nearly every single one, production suppliers in particular, were paid and on time or even early to keep production going. This I know for a fact first hand.

Why do you hate America so much? :mad:
 

RLJ676

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You guys took a Mulligan and are making the most of it.
I don't think anyone is saying you emerged from BK and sat around doing the exact same things you were doing pre-BK.

The old GM had tons of income, but debt servicing and pension obligations ate away at every dollar you made, to the extent that you were a financial services company that lost money making cars. And that put a huge crimp on new-product development.

The products developed under, and produced by, the New GM are vastly superior to the older products. And from what I can gather, your income is far beyond what was coming-in pre-BK.

But when headlines read "GM posts record profits" post-BK, and people are scraping by trying to get loan mods/re-fi's on their homes, you can't expect everyone to be giddy about it.

Fair enough. Just don't agree with the implication that "walking away from debt" is what has solely created these profits. I believe the cost of debt, if all the other changes were made, would still have us comfortably in the black right now. However, probably couldn't have gotten through the past 3 years and developed the vehicles while servicing the debt, so it definitely is critical.
 

Abc123

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You realize all the record profits come from screwing all the vendors and pention holders they left holding the bag, right? I mean if I extended a company credit to make muffler bearings and they BK, then post "Record Profits" I guess I'm more than a bit jaded to that.. But then again I'm a small business owner that has had company after company do exactly that to me for the last 3 years.... No Obama bailout for me! But then again I think of the bright side... Look at all the weight I lost with my pockets being so empty! :swear

After looking at your avatar for 6 minutes, I forgot what I was even reading. :thumbsup
 

RLJ676

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buzkill ahead..http://content.usatoday.com/communi...-cars-are-from-japanese-makers/1#.Tz22mVEmyRo
more current..http://minnesota.cbslocal.com/2012/02/06/good-question-which-cars-are-the-most-american/
I work on most makes of cars and trucks. They all seem to have their own failings, exacerbated by their operators.(my job, unexacerbater:party:)

You just posted the most bullshit "studies" ever passed off as journalism in that first link. Tell me, how exactly did they conduct that study? Does it actually tell you a single thing about the jobs involved in those cars? They just multiply volume times the sticker "domestic content" which typically includes Mexico/Canada. It tells you absolutely nothing about the real value add and jobs of any car. It's pretty telling that Camry production shut down for a long time because of Japanese tsunami....so much for "American content", because the reality is the vast majority of the tier II and lower parts come from Japan/china on that thing.

The second link gives the important info, nearly 80k employees for GM, nearly 30k for Toyota (the biggest of the transplants here) to sell about the same number of cars here. A single plant doesn't make a car, a company does and the white collar workers are what bring the most value to a country, through innovation (not to mention higher wages/taxes).
 

Maw

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It's hard to say that GM "paid back" all the money borrowed under TARP, something like $58B in total. They (GM) paid pack around $7B through a new DOE loan, not profits. The government had "accepted" an equity interest in the Company in exchange for the majority of the original loans and maybe one day the government will be out of the car business and can recover our money. Until that time taxpayers are still just unwilling stockholders.

In a normal BK the shareholders and creditors would have been allowed to sell off company assets and inventory in an attempt to recover a part of their investment. This wasn't allowed by the administration in this case.

At least this is what I'm remembering two years down the road.

Cheers
 
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