General Motors earned $1.3 billion in the second quarter, mostly in North America, which more than offset a $200-million loss in Europe and smaller profits from the rest of the world.
The automaker generated $2.8 billion of cash in the April-through-June period bringing its reserve of cash and salable securities to $32.5 billion.
"I am pleased with our progress on achieving our business objectives," said Chris Liddell, vice chairman and chief financial officer. "We have delivered strong product, maintained cost discipline, progressed strategic initiatives such as restructuring Europe and acquiring AmeriCredit.”
Comparisons to last year's numbers produce some pretty wild results due to the bankruptcy filing, but they show substantial growth nonetheless. Revenue rose to $33.2 billion, up 44% from last year. GM sold 731,000 vehicles in North America, up 85%, but indications are the retail demand is still a bit sluggish.
But 42% of passenger cars sold in the U.S. were to rental companies, corporations and government fleets, up from nearly 30% a year earlier. This indicates that retail demand is not coming back very strong due to the nation’s 9.5% unemployment rate and consumers who have seen their credit scores damaged by unemployment or home foreclosures.
While GM’s second-quarter was its second consecutive quarter profit after making $865 million between Jan. 1 and March 31, North American employment only grew by 2,000 jobs from the end of 2009 to 105,000 at the end of June.
That might change pretty soon. Rebecca Lindland, an analyst with I-H-S Automotive, reports that because GM cut so much production last year, they can't keep up with demand on some of the best sellers - and that may lead to some very good news for some workers in other states.
In fact, GM is having trouble meeting demand for new launches, because the company eliminated so much production capacity, so quickly.
Lindland says the big challenge for GM in the third and fourth quarters of this year is keeping dealers stocked with the hottest cars and trucks.
"That's kind of the worst case scenario," says Lindland, "where a consumer goes into the showroom and wants to buy the new Chevy Cruze and it's not there and they go someplace else."
GM is likely considering re-opening one of the two plants it put on "standby" -- either the Janesville, Wisconsin plant or the Springhill, Tennessee plant.
Will Bob Corker be available for photo ops if and when Springhill comes back on line? That would make for some fun video. Maybe he would like to get in on the IPO as well. Matter of fact, maybe we should buy some shares for him, and send them as a gift of thanks for all his help. Wouldn't that be nice of us?
General Motors Co. plans to file paperwork to launch a public offering on Friday, two people briefed on the matter said today.
The move -- first reported by CNBC -- will allow GM to begin selling shares before year's end, and will come a day after the company will report a profitable second-quarter results.
Whitacre said the Treasury Department will shrink its 61 percent stake to under 50 percent during the first sale -- but he said he hoped it was far more than that. The government swapped about $43 billion of its $50 billion government bailout for its majority stake in the Detroit automaker.
"We want the government out. Period," he said.
Can't say as I blame ya there, Ed. Here's hoping you achieve that goal as quickly as possible, and this goes down as one of the greatest "government bailout" success stories ever.