GM scores $891 million profit
Days after Ford reported a $750 million profit for the second quarter, General Motors today reported a second quarter profit of $891 million, despite a downturn in American sales of its core large truck and SUV brands.
As was the case with Ford, a substantial part of the profit was attributed to cost cutting moves by the company. Translated, that means the company is beginning to see the benefits from all of the long-term UAW workers who accepted buy-outs from the company in the past year.
Also as with Ford, another big contributor to the profit was operations outside of the United States. In particular, GM revenue in so-called “growth” markets (meaning China) was strong.
Perhaps the best news, however, was domestic.
GM’s United States operation lost a mere $39 million for the quarter. In the second quarter of last year, it lost $3.95 billion.
That’s a turnaround.
Unlike Ford, GM’s operating profit was actually greater than its reported profit. GM took a hit of $374 million for its share of the Delphi bankruptcy liabilities. Were that added into the reported profit to come up with the operating profit, GM would have over $1.2 billion in profit for the quarter.
Despite the fact that this is GM’s third consecutive quarterly profit, analysts still claim that whether the company makes money for the year will depend on the current negotiations with the UAW over a new master contract, replacing the one expiring in September of this year. (These, of course, are the same analysts who predicted a huge loss for Ford this quarter, so getting the salt out is appropriate.)
When it was mistakenly reported that Mark Twain had died, his response was, “The reports of my death have been greatly exaggerated.”
It appears the same may be true of General Motors.