GM profit rises despite trouble in Europe

Surging U.S. sales brings $1.4B pre-tax profit domestically

February 15, 2013 

— General Motors said its profit in the fourth quarter increased slightly as continued losses in Europe offset positive results in North America.

GM, the nation’s biggest carmaker, said it had net income of $900 million in the quarter, compared with $500 million in the same period a year earlier. Revenue increased to $39.3 billion, up from $38 billion.

The company said strong sales in the surging U.S. market helped it post a $1.4 billion pretax profit in North America.

But in Europe, General Motors, like many other automakers, is continuing to absorb big losses from the worst sales environment in nearly 20 years. The company said it lost $700 million in the quarter.

The fourth quarter capped a transitional 2012 for GM, its third full year of operations since its bankruptcy and $49.5 billion government bailout in 2009.

While it is struggling to restructure in Europe, the company is in the process of introducing several new models in the United States, including revamped versions of its highly profitable pickup trucks.

GM also negotiated a sale of the Treasury Department’s ownership stake in the company.

For the full year, GM said it had net income of $4.9 billion compared with $7.6 billion in 2011. Executives said the 2011 profit included $1.2 billion in one-time gains on asset sales.

For the year, revenue grew to $152.3 billion, up from $150.3 billion in 2011.

GM’s chief executive, Daniel Akerson, said the company had a solid year in 2012, and said its future performance would depend on growing sales with new models.

“This year our priorities will be executing flawless new vehicle launches, controlling costs and delivering more vehicles to our customers at outstanding value,” Akerson said in a statement.

GM executives were cautious about predicting better overall results this year.

Dan Ammann, GM’s chief financial officer, said the European market would continue to deteriorate this year. However, the company is still predicting it will break even there by mid-decade.

“We feel better and better about the things we can control,” Ammann said.

Akerson said that cost cuts will continue in Europe. He said GM eliminated about 2,500 jobs there last year and expects the same number of cuts in 2013. He declined to say whether the company might close any more plants beyond the announced shutdown of a factory in Germany by 2016.

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service