October Surprise: GM's Q3 Numbers Better Than Expected

Bertel Schmitt
by Bertel Schmitt

GM delivered its October surprise by posting what Reuters calls “a surprisingly strong profit.” In a bit of a hail Mary pass, GM said it is targeting a return to break-even levels in Europe by mid-decade.

GM’s third-quarter net income fell to $1.48 billion from $1.74 billion a year earlier. Excluding one-time items, GM earned 93 cents a share, surprising analysts who expected only 60 cents.

In Europe, GM expects a full-year operating loss of $1.5 billion to $1.8 billion, depending on what restructuring costs will be in the fourth quarter. GM hopes for slightly better European results in 2013, and to reach break-even there by mid-decade. Hope springs eternal, especially in the week before the elections.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

More by Bertel Schmitt

Join the conversation
10 of 34 comments
  • Carlson Fan Carlson Fan on Oct 31, 2012

    I was looking for more of an average dollar amount the bailouts cost each taxpayer. I know people that had to sell their homes due to things like divorce and both were put into financial ruin because they couldn't sell them for anywhere near what they had payed when the economy was good. Even when they were prepared to take a 6 figure loss. Again the whole housing bubble and the auto bailouts are completely connected. For me that's the bigger picture, not that a few of my tax dollars that were spent on the bailouts. If that hadn't happened the government would have sent me check? Probably wouldn't have been enough to fill the gas tank in my lawnmower!.......LOL

    • WRohrl WRohrl on Oct 31, 2012

      Just because for a while people were able to sell their homes for significantly more than they paid for them does not mean that they were operating in "a good economy". The whole system was proven to be a house of cards, the possibility of the housing price increases continuing were in hindsight by most everyone obviously unsustainable. As far as what the bailout cost, seeing as how the US Gov't holds an equity position that it still has not sold, the jury is out. If for some unfathomable (to me) reason GM stock should rise significantly and the government actually see a positive return on their (our?) "investment", then that would kind of invalidate the argument you seem to be making as it would not have COST the taxpayer anything. There are many government expenditures that seem to be even more egregious and of even lesser benefit (a certain bridge in Alaska comes to mind...) The housing bubble bursting is what caused the slowdown in the auto markets which then begat the bailout, not the other way around. Most people who purchased a home and then were looking at a 6-figure loss way overpaid to begin with which can be figured out by looking at the increase in the market in the years before they bought that particular property compared to longer-term averages. VERY FEW people who purchased their home only 10 years ago are currently underwater. VERY MANY people who purchased their home 5 years ago ARE underwater. That tells you something... If the only way you can afford to purchase a home is with TWO people contributing a significant portion of their paycheck, then you are buying too much home. Yes, there are plenty of areas where it seems that there is no other option, but that option opens you to significantly more risk. Plenty of people are moving from ridiculously priced areas to extremely nice areas where this is a non-issue. We moved from the SF Bay Area to Northern Colorado precisely due to this. We have found our quality of life to be immeasurably improved and do not particularly miss our old surroundings, we can now afford to visit whenever we feel the urge...not often, and thus have ended up visiting other places we have always wanted to go to.

  • Carlson Fan Carlson Fan on Nov 01, 2012

    "Most people who purchased a home and then were looking at a 6-figure loss way overpaid to begin with" No, they paid what the market would bare at that time. The more expensive the home the bigger the opportunity for loss. If they would have told the seller it's overpriced I'm not paying that much they would have been sent walking. And the house would have sold regardless to someone else. "Just because for a while people were able to sell their homes for significantly more than they paid for them does not mean that they were operating in “a good economy”. " So in my case the value of my first home more than doubling in 5 years when the square footage never changed was a "bad economy"? Or when builders are putting up homes on lots in new developemnts because they can sell that quicker(most/all sold before they were even done being built) than an empty lot that is not a "good economy"? If the economy wasn't good, where were all these people getting all this money to buy these homes?

    • See 2 previous
    • WRohrl WRohrl on Nov 01, 2012

      The fact that your house doubled in value in five years is not at all indicative of a good economy. Did US GDP double in those same five years, did the average salary double? Did inflation double? No, all of which indicates that the fundamentals were off, i.e. not a good economy in regard to the housing industry. Did you expect the home to double again in value in the next five years? How long could this go on before you ran out of people with the income to support a purchase at that level?

  • Tparkit Tparkit on Nov 01, 2012

    GM is gonna need a channelectomy after this pre-election stuffing.

  • Carlson Fan Carlson Fan on Nov 01, 2012

    "They exactly overpaid. That’s what buying into an obvious bubble is." If you need a house, you need a house. You pay what the market dictates. It's that simple. People don't have the option of not buying a home, like you would with the newest and latest I-thing from Apple. Renting for most families would not have been a realistic option.

    • See 1 previous
    • El scotto El scotto on Nov 01, 2012

      @WRohrl Depends on the housing market. A lot of houses/townhomes in DC want 1 month deposit, first and last months rent up front; 3 months rent before you get your keys. Plus restrictions like no pets, no smoking,no wallpaper, no painting and you pay the HOA. Full disclosure, I rent and I've moved 3 times in 5 years. Chasing my job.