By on August 4, 2011

GM has announced its Q2 earnings [Analyst slides in PDF here], and the firm has recorded a healthy $2.5b profit for the quarter on strong North American performance and an end to losses from the European Opel division. In fact, on an EBIT (earnings before interest and taxes) basis, all of GM’s global divisions were in the black last quarter, although GM Europe and GM South America both recorded modest $100m gains and GMIO (which includes the lucrative Chinese market) recorded a $600m EBIT. The powerhouse continues to be GM North America, which recorded $2.2b in EBIT, continuing North America’s post-bailout importance as the driver of GM’s financial results. Globally, a $600m reduction in EBIT due to costs and “other” was offset by the same amount of gains in volume/mix, while pricing added a billion dollars to overall EBIT. And though fleet sales were up in North America, incentives for the quarter appear to have hit record lows. [Hit the jump for global deliveries and market share/fleet data, via GM’s financial highlights release].

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14 Comments on “With Opel Back In Black, GM Records $2.5b Profit in Q2...”

  • avatar

    “In Europe, GM’s profit of $102 million, swinging from a $160 million loss the prior year.”
    Good to see the EU region finally turn a profit. Hopefully GM will not kill/sell their Opel unit. Total sales of 4.53M vs 3.01M for Toyota. Some of the revenue is a “pull forward” from unsold trucks, which is going to affect future revenues, unless sales shoot up dramatically – Not Likely
    Sales are up 470,000 for the first half. Low profit Wuling sales are actually down by 33,000 units.
    Finally, I had no idea GM’s employment was at 208K vs TM’s 317K

  • avatar

    In the April press release, GM reported US deliveries of 232,538 units, 75,868 (33%) of which were fleet.

    In the May press release, they reported US deliveries of 221,192 units, 70,139 (32%) of which were fleet.

    In the June press release, they reported US deliveries of 215,358 units, 70,139 (32%) of which were fleet.

    Add those up, and you get fleet sales for the quarter of 30.6%.

    Yet above, in the unaudited financial statements, GM is reporting US fleet sales for the second quarter of 34.8%.

    This translates into about 28,000 more units of fleet sales during the quarter than were previously reported. It makes you wonder what cars are being underreported. (The “why” is easier to guess.)

  • avatar

    GM making money is a good thing. Let’s see if WE, THE PEOPLE, will be getting back some of that bail out money we flushed down that drain. It’s a cinch that with GM stock down 25% WE, THE PEOPLE, will not be getting it back that way.

  • avatar

    I don’t follow the stock market that close. The ups, and downs,and ins, and outs, are beyond my thinking. Thats kind’a why I pay an expert to do it for me.

    However I do understand basic math. Yup, GM stock is down, Ford to. Look even Toyota. Royal Bank of Canada, a major blue chip is down. Oil is bellow $100,and falling. The Loony, and the Greenback are moving a little closer.

    WTF does it all mean,and what are the ramifications? I havn’t a clue.

    So prey tell,.. “highdesertcat” How can you possibly predict that the taxpayers of United States and Canada,and for that matter the UAW will not get thier money back?

    • 0 avatar

      mikey, I guess you forgot about the $1.2B it cost the US tax payers to bribe Fiat to take that Chrysler albatross off our hands. But I get a kick out of the audacity of the UAW to think that Marchionne would give them a seat on the board. LOL! That’s rich! Why would he ever do that!?

      Let’s see GM do the right thing here and pay back $1B of the ‘profit’ they made to the US Treasury by Sep 30, 2011. That would be a great start. Every time GM makes a profit, give half of it back to the US Treasury. I see no indication, anywhere, that GM stock will EVER crawl back to its IPO level, any time, without divine intervention. Do you?

      I had no idea that the UAW even paid in any money toward the bail out of GM. They were lucky just to keep their jobs after having collectively bargained GM into bankruptcy, even though it did not make sense to most Americans to keep 6% of the workforce employed at the expense of the remaining 94% of the workforce. If you can do the math, do the math and see for yourself.

      BTW, I cannot speak for Canada or the Canadian tax payers. My concern is only with what’s best for my country, and GM clearly is not, as long as the tax payers have money tied up in a failed company that cannot make it on its own without tax payer money.

      If you think for one moment that the tax payers will be able to recoup any of the bail out money we poured into GM (the failed one of only two US auto manufacturers), you keep right on believing that. Hope springs eternal.

      But as you said before, we can agree to disagree about this except that all the unemployed people in the US would have been better served if the bail out money showered on GM would have been used to create or save their jobs, instead of keeping the UAW members living large at tax payer expense.

  • avatar

    @highdesertcat…Let me ask you this. No matter how you got there,the U.S. tax payers own 32% of GM…..Right?

    So… as a US taxpayer,would you rather GM make a profit, or not?

    • 0 avatar

      If GM had some unusually high repayment obligations that varied based upon profits, investors would note the company’s abnormal financial burden and punish the stock price accordingly with a lower stock price.

      This wouldn’t be a great thing for a shareholder. And as a US taxpayer, I am a shareholder. So no, it wouldn’t be a great idea. If GM gets its act together over the long run, I’ll be content with recovering as much as possible from the stock sale, and then the 35% that we collect in taxes.

    • 0 avatar

      mikey, I would prefer that GM pay back all the money the tax payers gave them, the sooner the better. In order to do that, GM has to make money any way it can. I wish that there were more GM fans to buy their products but the mass exodus took care of that possibility a long time ago.

      I do not believe that GM is paying back the bail out bucks yet, or ever will. I am suggesting that GM take half of its “profits” it makes each month and apply them to the repayment of the bail out bucks.

      I don’t know what accounting method GM is allowed to use but I would guess that it is a pretty liberal one, specifically designed for them with plenty of special tax accommodations and privileges not afforded to Ford, or any of the other car makers in the US.

      In essence, I see that tax payers continue to subsidize GM either directly or indirectly. Pch101 has addressed the taxation issue but I don’t know if GM is actually paying taxes or finagling its past losses against any current taxes due. In short, I do not believe that GM will ever be able to pay back the money that the tax payers lavished upon them. I hope to be wrong and see all that money paid back.

      In the end, the big winners are the UAW and its members. The losers are, without a doubt, the tax payers, just like in the case of Chrysler and the $1.2B bribe to Fiat.

      I offer one suggestion for GM that I read on other boards posted by different people, and that is for GM to sell itself to any conglomerate that will have them, i.e. GM Shanghai, any of its affiliates, or competitors.

      Like several others who offered this suggestion, I would like to see GMC go the way of Saturn/Pontiac/Oldsmobile, and I would like Buick to be sold to China, where it is making money, and then import made-in-China Buicks to North America. That would work!

      GM would make a lot more money that way, and could send money back to the US, like Toyota sends money back to Japan. Were that to happen I believe the tax payers would stand a better chance of ever getting back SOME of the money this failed company has cost us.

      BTW, I have owned several GM products over my lifetime, but bought my very first foreign vehicle for the US market in 2008. I liked it so well I bought a 2011 Tundra 5.7 in Jan 2011 to replace my 2006 F150 XLT. I am not biased. I have owned them all. But I do know what I like best and what is the better product for me.

      • 0 avatar

        You’re worried about $1.3B from the government to Chrysler? We gave that in foreign aid to each of Egypt, Pakistan and Afganistan last year. It’s probably the cost of one F22 engine. It’s about 1/100th of AIG losses. not exactly a huge cost for lower chapter 7 liquidation impacts on america of Chrysler shutting down (no DIP lender would touch it as a Chapter 11).

  • avatar

    The General is back. Deathwatch? LOL

  • avatar
    Mike Kelley

    I wouldn’t expect GM to be paying a lot of taxes in the future:

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