General Motors announced overnight that it has posted a second quarter profit of $US891 million which is a fair chunk of good news given that a year ago they posted a $US3.4 billion loss.
In a similar vein to Ford who also announced a second quarter profit earlier this week, GM were assisted by the improved performance of their finance arm GMAC who contributed $US139 million in net income to the result. GMAC are jointly owned by Cerberus Capital Management (the same firm who will shortly own Chrysler Corporation) and GM. GM realized the $US139 million income from GMAC via its remaining 49 percent stake in the business.
Total revenue from auto operations rose from $US44.8 billion for the second quarter of 2006 to $US45.9 billion.
"It's true that our North America team has made huge improvements, and we appreciate everyone's hard work," CEO Rick Wagoner said in a statement. "But our current earnings clearly demonstrate we've got more to do."
GM may have a long way to go but we need to keep in mind that this is the same business that has lost more than $US12 billion over the last couple of years and viewed in this light the result is promising and no doubt heart warming for shareholders.
The restructuring pain will continue at GM as they continue to close plants across North America (12 in all) and slash some 34,000 jobs. GMâ€™s North American automotive net losses fell massively to $US39 million for this quarter compared to $US3.95 billion for the same time last year when a number of significant charges relating to GMâ€™s attrition plan were absorbed.
Despite the inability to turn a profit in their home market, GM are performing well around the globe with sales in Asia (specifically China) and Latin America exceeding expectations. They even managed to wrestle the second quarter top sales position back from Toyota by selling 2.41 million vehicles to Toyotas 2.37 million.