“record $7.6 billion profit”
Nobody run out and buy their stock just yet.
Overseas sales were very bad...domestically, very good. (read: ARRA buying of GM products for every local township and dogcatcher).
First 3 quarters: $7.1 Billion
4th Quarter: $0.5 Billion
(read: every township and dogcatcher has to wait until January to buy another GM car)
And really, if somebody gave me $82 Billion in no interest loans, I would be disappointed if I couldn’t turn a $7 billion profit selling lemonade. How could they not make a profit?
The target for them was 42 cents a share (it seems other people figure they couldn’t help but make money). They ended up below target at 40 cents.
Add in all the ill will, and people who will not ever buy GM again. Figure no more ARRA money will flow to buy these cars...and well, it will not end well for GM. They are underperforming overseas, and relying on cronyism at home. That can’t last.
Oh, we the people still own 26%...and we stand to lose $10 billion at today’s stock price.
Weren’t the future health retirement benefits allocation taken off the books because of Obamacare? If yes, then this would makeup a substantial part of the bottomline. I mean I thought the whole purpose for Obamacare was to have taxpayers liable for paying future union health benefits.
I once heard that on average $2300 of every GM car was to pay for future retirement benefits of union workers. If half of that is allocated for future health retirement benefits taken off the expense column, then multiply by the number of vehicles sold and voila, you got yourself a whopping instant profit.
Also how many GM vehicles were sold to government using stimulus?
The point is that GM likely used gimmicks and political favors to turn a profit, not by merit of any superior product or change in process. Nothing much has changed in labor contracts with GM which is what kept them unprofitable for so long. So the profit is coming from somewhere and that somewhere is likely Obamacare courtesy of the US Taxpayer.