# GM posts first quarter profits of $3.2 billion



## Chris (May 5, 2011)

General Motors posted a $3.2 billion profit in the first quarter, which was also its first full quarter as a public company. Sales were $36.2 billion, up $4.7 billion from the quarter a year ago, GM said.

Net income per share was $1.77. The profit was boosted by some one-time gains, particularly the sales of GM's stake in Delphi, its former parts unit, and its preferred shares of Ally Financial, the former GMAC captive finance unit. But even excluding those items, profit was $2 billion before interest and taxes, beating analysts expectations of about $1.6 billion and up from $1.7 billion in the quarter a year ago.

It was a fifth consecutive profitable quarter, if you include quarters before it became a public company last November.

General Motors posts $3.2 billion 1st-quarter profit - Drive On: A conversation about the cars and trucks we drive - USATODAY.com


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## Zander (May 5, 2011)

How much do they still owe the US Government Chris??


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## editec (May 5, 2011)

Zander said:


> How much do they still owe the US Government Chris??


 
Unless I've been misinformed, I don't think GM owes the government anything.

The Government owns SHARES of GM which it can sell off.

Seems to me a better move might be to pay off part of the $2.4 TRILLION the government owes the Social Security Trust fund, with those stocks, instead.

But they cannot BY LAW, because the law says that the SSTF must purchase the safest bonds it can find, and we are still telling ourselves that the safest bonds to own are US bonds.

Now isn't that a lovely way to rape the working class every paycheck such that they end up giving the money to the government so they can piss it away on tax breaks for billionaires and wars of imperialism.

The bastards we are up against are NOBODY's FOOLS, folks.

They can figure out ways to STEAL FROM THE WORKING CLASSES seven ways from Sunday.


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## uscitizen (May 5, 2011)

I dunno but GM is hiring a few hundred at it's Bowling Green, KY plant.

Seems like this GM thingy must have worked somewhat as a stimulus.

TARP has created how many jobs?


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## boedicca (May 5, 2011)

uscitizen said:


> I dunno but GM is hiring a few hundred at it's Bowling Green, KY plant.
> 
> Seems like this GM thingy must have worked somewhat as a stimulus.
> 
> TARP has created how many jobs?




They are telegraphing rounds of "Cost Decreases" and "Price Initiatives".   I'm translating that into another round of Taxpayer Funded Subsidies (Rebates) to prop them up.

_The companys global market share came in at 11.5%, the same as in the first quarter but above the 11.1% share it held in the first quarter of 2011. GM North Americas share fell to 18.3% from 18.5% in the fourth quarter, including a drop to 19% from 19.1% in the U.S.

Earnings before interest and taxes in North America rose to $2.9 billion from $1.2 billion the previous year, helped by volume and mix but hurt by price and costs. The company said it will get a better boost from prices in the second quarter, but volume will be flat and mix could be somewhat weaker. But the company posted a $400 million EBIT loss in Europe.

In Europe our restructuring is starting to take hold, the company said on its earnings call, and GM said its full-year Europe adjusted EBIT would be break-even after excluding restructuring costs.

The company also faces other pressures, including increasing materials and commodity costs; GM said on the conference call that it would try to offset higher commodity costs with cost reductions in other areas. The company also said it will also use price initiatives to make up for the higher costs. We will do our best to offset that as much as possible._

GM Beats Expectations as Profit Triples; U.S. Market Share Dips; Shares Dropping Early - Stocks To Watch Today - Barrons.com


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## Skull Pilot (May 5, 2011)

How come you aren't outraged at such an enormous profit?

If it were Exxon you would be.


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## Chris (May 5, 2011)

Skull Pilot said:


> How come you aren't outraged at such an enormous profit?
> 
> If it were Exxon you would be.



Because what's good for GM is good for America.

What's good for Exxon is bad for America.


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## Cuyo (May 5, 2011)

Zander said:


> How much do they still owe the US Government Chris??



Technically speaking?  Nothing.


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## Zander (May 5, 2011)

Cuyo said:


> Zander said:
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You are misinformed. They owe TARP billions. Billions that we will never, ever see.


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## Toronado3800 (May 5, 2011)

An interesting situation. GM does sort of still owe the government money and they sort of paid off what they were lent. 

We are sort of lending them more money in the same way TIFF creates money for developers to use. Of course that is an alnost independent situation. Ish.

Guess the powers of the big two political parties can not imagine an America sucks enough to have only one domestic automobile manufacturer.

Oh well. The present GM is interesting. Running a company in the black after walking away from the debt of the greatest generation is a step.  Of course I whined when Monsanto created Solutia to walk away from its problems.

I dont know if I am brave/radical enough to have let GM fail. Conservative is me I suppose. Funny thing is it gets me tied up in all this creative liberal capitalist Wall Street accounting.


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## Zander (May 5, 2011)

GM didn't pay back squat. They played a shell game with borrowed money. They are now being investigated by the FTC for false advertising.  In one of the ads that GM was running last year , GM CEO Ed Whitacre says the company has paid off the loans "in full, with interest, five years ahead of schedule."

Problem is- it's not true. GM 'paid off'  the loans using money it received from the Troubled Asset Relief Program. It's like paying your credit card with a credit card. A total con.


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## Skull Pilot (May 6, 2011)

Chris said:


> Skull Pilot said:
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Bullshit.

You're just a hack who wants to justify the government bail out.


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## Cuyo (May 6, 2011)

Zander said:


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No.  You're wrong.  The government owns roughly 33% of the company as of today; Therefore it has an ownership interest in the corporation.  The company does not technically "Owe the government money," any more than it "Owes" any other shareholder money.  All the actual "Loans" have been paid back.

FYI the initial ownership stake in the newly organized company was >60%.  They've already transferred a large portion of their ownership interest back to the private sector.


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## editec (May 6, 2011)

I think the problem is that the US government paid too much for those stocks.

Or did they?

Anybody know iff hand how many stocks were purchased and at what price they were purchased?

I say that they were overpriced because technically, I think, GM was bankrupt, ergo their stocks weren't worth doodle squat when the government saved it.

I still think it was the right move to make but O'd really like to understand the specifics of that bailout and how much it really cost the taxpayers initally.

Cuyo, you seem to have a handle on this event, what say you about these prices we paid for the 60% of GMS stock?

Did we overpay for it, and more importantly can we recapture our investment at todays price per share?


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## Cuyo (May 6, 2011)

editec said:


> I think the problem is that the US government paid too much for those stocks.
> 
> Or did they?
> 
> ...



GM is trading ~$30 a share.  The break even point for Uncle Sam is about $53.  If they sold today, they'd lose somewhere in the neighborhood of $7-$10 Billion.

Remember of course, that the government is not a for-profit institution.  The purpose of the rescue was to prevent 266,000 people from being unemployed and relinquishing more of our manufacturing sector to Asia... For that purpose it's been a huge success beyond even what the proponents had hoped for...


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## Toronado3800 (May 6, 2011)

Now is a good time to bring up another reason for the bailout and what I consider a statement about human nature:

Frequently when capitalism hits the skids there is a socialist movement if not violent revolution.  Just as we need laws to keep capitalist humans humane, we need a cushioned bottom to prevent unrest.

That and we wanted GM to stay afloat to keep us with some industrial base. Darn competition with the rest of the world we can not loose.  I am not in love with corporations being treated like living entities either.  Next thing you know they'll get to vote.


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## Douger (May 6, 2011)

Clarity:
Ohio.com - China surpasses U.S. in buying GM vehicles


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## Zander (May 6, 2011)

Cuyo said:


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  Ok.  General Motors&#8217; Debt | FactCheck.org


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## Cuyo (May 6, 2011)

Zander said:


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Your article is a year old, and is _completely_ consistent with what I've said.

Since the publishing of that article, they have sold about half of their stock during the newly restructured GM's IPO.  The ownership interest is now around a third.


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## Zander (May 6, 2011)

Cuyo said:


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Except you don't think that GM "owes" us any money. Simply hilarious!   Thanks, I really did need a laugh this morning.


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## boedicca (May 6, 2011)

The GM books are cooked due to the government allowing them to keep Net Operating Losses which in a normal bankruptcy proceeding, would have been voided.

But then again, our Government's specialty is Bogus & Misleading Accounting.


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## rightwinger (May 6, 2011)

Great job by ObamaMotors...

I guess all the gloomy predictions from the right were wrong, and Obama proves he is the only adult in the room


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## Cuyo (May 6, 2011)

Zander said:


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OK, your semantics are getting tiresome.  Lets keep it binary.

Question: Does GM owe the government money?
Answer: NO. THEY. DO. NOT.

GM repaid their debts by selling stock.  The government owns about 1/3rd of the new entity.  By definition, they do not owe the government money.

Icahn bought a shit load of Yahoo stock a few years ago and took a bath on it.  Does Yahoo owe Icahn money? Answer: NO. THEY. DO. NOT.

It's not that complicated, even for the incredibly dense.

Sidenote, from the excellent performance of GM, it appears the government will ultimately turn a profit.  But again, that was not the motivation - The government is not Carl Icahn.  The motivation was to keep the company in business to prevent catastrophic losses to our manufacturing sector.  And yes, as deep as your desire to hate Obama runs, they were successful to that end.


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## Zander (May 6, 2011)

Cuyo said:


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Carl Icahn is a private investor who assumed a risk to make a profit. He gambled and lost. It's called Capitalism. The US Government is not a business or an individual.  Your analogy is weak, a lot like GM! 

But anyway, please feel free to spin in it anyway you like.  The bottom line is simple -  the US taxpayers gave GM over $50 billion. The taxpayers now own GM stock that is worth significantly less than the money they were given. That is a loss.  To add insult to injury we are paying interest on the money that we borrowed so that we could save GM - a double loss.  

PS- I was reluctantly in favor of the bailout based on the information we had at the time and I don't hate Obama. I did not like the way GM lied in their advertisements about "paying back the loans" and I don't like being continually lied to about their "excellent performance".  They are a structurally weak company and will be lucky to survive.  The chances of the US Government recouping their "investment" in GM are astronomically low.


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## Spoonman (May 6, 2011)

Chris said:


> General Motors posted a $3.2 billion profit in the first quarter, which was also its first full quarter as a public company. Sales were $36.2 billion, up $4.7 billion from the quarter a year ago, GM said.
> 
> Net income per share was $1.77. The profit was boosted by some one-time gains, particularly the sales of GM's stake in Delphi, its former parts unit, and its preferred shares of Ally Financial, the former GMAC captive finance unit. But even excluding those items, profit was $2 billion before interest and taxes, beating analysts expectations of about $1.6 billion and up from $1.7 billion in the quarter a year ago.
> 
> ...


So does this mean we can now get our money back?


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## Leweman (May 6, 2011)

final total loss to tax payers a mere 34 billion dollars.  No biggie.


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## Spoonman (May 6, 2011)

Leweman said:


> final total loss to tax payers a mere 34 billion dollars.  No biggie.



a drop in the bucket compared to the total blood letting team obama has given us


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