On Thursday, General Motors Corp. posted its best quarterly profit in six years in one of the clearest signs yet the ailing automaker (and its beleaguered industry) is on a road to recovery.
The record profits were posted slightly more than 12 months after a steep drop-off in sales caused by the financial crisis of 2008/2009.
GM says that the strong profits will pave the way for the company file for an IPO and begin to rid itself of a more than US$50-billion taxpayer liability -- company equity that is majority owned by the U.S. government.
Total second-quarter earnings came in at US$1.3-billion, a huge reversal from the US$12.9-billion it lost in the same period a year ago. Revenue jumped 44% to US$33.2-billion during the quarter.
Last year the government had estimated that it would take perhaps 8 years for the GM to pay taxpayers back. The quick GM rebound however has surprised even the most optimistic of forecasts.
“Given the extraordinary turnaround — frankly, faster and better than what we had imagined — I think the IPO could be very successful if the overall markets co-operate,” Steven Rattner, the Obama administration’s former Car Czar, said in an interview on Bloomberg Television.
Thursday, August 12, 2010
General Motors: "Extraordinary Turnaround"
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Eldon,
ReplyDeleteCan you ever recall a time when the media and markets ignored almost all good economic data? It almost seems like the analysts/media want another recession. Won't it be a self-fulfilling prophesy at some point?
Bill,
ReplyDeleteYes. It it the main reason I started this blog. The leaders of main stream media -- by their own admission -- focus on bad news. In good times and bad, it is the negative that sells more.
It is always refreshing though when people act based on larger observations beyond the media. In my opinion it is in that action against a backdrop of negativity, that brings about positive change.
Hi!
ReplyDeleteI read your post...nice post!
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