GM Posts Its First Annual Profit Since 2004

Color me surprised.

General Motors, which nearly collapsed from the weight of its debts two years ago before reorganizing in a government-sponsored bankruptcy, said Thursday that it earned $4.7 billion in 2010, the most in more than a decade.

It was the first profitable year since 2004 for G.M., which became publicly traded in November, ending a streak of losses totaling about $90 billion.

In addition, G.M. said 45,000 union workers would receive profit-sharing checks averaging $4,300, the most in the company’s history.

I honestly did not expect GM to turnaround at all. I figured the government cash would allow it die more slowly, but still die. Given the general state of the economy, though, it’s nice to see some good news.

FILED UNDER: Economics and Business, Quick Takes, US Politics, , ,
Alex Knapp
About Alex Knapp
Alex Knapp is Associate Editor at Forbes for science and games. He was a longtime blogger elsewhere before joining the OTB team in June 2005 and contributed some 700 posts through January 2013. Follow him on Twitter @TheAlexKnapp.

Comments

  1. michael reynolds says:

    I think you must be wrong. Because if you were right it would mean that:

    1) Governments can successfully intervene to preserve businesses considered national assets.
    2) Obama just saved the American auto industry.

    Neither of these things is possible in the Republican cosmological view.

    And the secondary conclusions are even worse:

    1) It’s possible the government can do good.
    2) It’s possible Obama is not out to destroy America.

    And if those things are true then:

    1) Republican ideology may be bull–it.
    2) Obama may be a good president.

  2. David says:

    I’m sure the people who were against the GM plan saying it was throwing money away and GM would become a drain on the economy as another failed government experiment will say they are wrong now, right?

  3. michael reynolds says:

    David:

    Let’s you and me just sit here and wait for that to happen.

    Is that a cricket?

  4. anjin-san says:

    Can’t imagine why bithead has not weighed in…

  5. anjin-san says:

    > In addition, G.M. said 45,000 union workers would receive profit-sharing checks averaging $4,300, the most in the company’s history.

    Well that HAS to be bad for the economy.

  6. john personna says:

    To understand this story you have to understand that the entity called GM is a new construction, and is not at all old GM with all its parts, turned around.

    The proposed plan will cleave apart one of the country’s oldest and largest companies into, in effect, a “New GM” and “Old GM,” evoking the historic breakup of AT&T Corp. in 1984 into long-distance and local-phone companies. As with the dismantling of Ma Bell, GM will have to meticulously apportion every line-item of revenue and expenses to the two companies, be it employee salaries or the cost of a new wrench.

    http://online.wsj.com/article/SB124382030769070939.html

  7. David says:

    I know, right?

  8. wr says:

    JP — Yes, that’s why it’s called a “reorganization.” I don’t get what your point could possibly be, except that you’re desperately trying to avoid saying that saving the company was a good thing for everyone.

  9. James Joyner says:

    I’d be hard pressed to figure out how the New GM could fail to be profitable in the short term given that it was allowed to dump all its bad assets, get relief from bad labor deals, and got a massive infusion of cash from the taxpayers.

    The question is whether any of this is sustainable. Will the management repeat the mistakes of the past or continue to put out cars people want?

    In the medium term, I’m still skeptical that Western companies can compete in making non-luxury automobiles against China and India, given their massive labor advantage.

  10. anjin-san says:

    > The question is whether any of this is sustainable

    We will see. If GM was dead, it would be a moot point.