Image Coming Soon
Image Coming Soon
Image Coming Soon
  • 1
  • 2
  • 3
  • 4
Previous Next

GM Made Record $7.6 Billion in 2011

By Alisa Priddle, Detroit Free Press

General Motors made a record $7.6 billion in 2011, driven by a $7.2-billion profit in North America that ensures its highest profit-sharing payments of $7,000 each to its UAW workers.

Overall, GM’s 2011 profit rose from last year’s $4.7 billion and broke the previous record annual profit of $6.7 billion in 1997.

Revenue for the year increased 11% to $150.3 billion and earnings before interest and tax was $8.3 billion compared with $7 billion in 2010

The full-year results were hampered by Opel, its European unit, which lost $700 million – a $1.3-billion improvement, but Opel’s 12th straight annual loss in a market struggling with overcapacity. The loss raises more questions about the wisdom of reversing the decision to sell Opel in 2009.

“We grew share around the world,” Dan Ammann, GM’s chief financial officer, told reporters this morning.

“Clearly, we have work to do in Europe and South America,” he said.

Fourth-quarter net income of $500 million was flat from a year ago, but the profit of 39 cents per share was below the 41- to 43-cent range analysts expected.

The strength of North American operations means GM’s profit-sharing payment is the largest since 1983 when payments began.

The payout formula was changed to become simpler and more transparent as part of last fall’s contract negotiations with the United Auto Workers union.

The typical Ford employee is eligible for $6,200 based on the $6.2 billion in operating profit in North America in 2011.

Chrysler workers are eligible for $1,500. The Auburn Hills automaker had an operating profit of $1.97 billion and about 85% was derived from North America.

GM’s payment has only exceeded the amounts at both Ford and Chrysler twice since 1983. The previous record GM payout was last year’s average of more than $4,000 each but most years the amount was less than $1,000 and substantially below the other Detroit automakers.

GM’s 26,000 salaried workers learned Wednesday that senior workers are being shifted to an exclusively 401(k)-type pension and while some can expect larger bonuses, that is not the case across the board. Salaried workers’ compensation is based on global performance metrics.

Ford recently told its 20,000 salaried employees in the U.S. and Canada they will receive bonuses as well as merit raises for the first time since 2008.

Losses in Europe for the quarter were $600 million.

“Clearly the industry has too much capacity,” Ammann said, “there’s no debate about that.”

“We are working on the pieces of the business we can control,” he said. “We are in discussions with our stakeholders,” he said, but GM is not providing guidance at this time about planned moves to cut its own capacity.

Ammann described GM’s product portfolio in Europe as “the best it’s been in years.”

Losses in Europe for the quarter were $600 million.

South America lost $200 million. GM has an aging product lineup and workforce that needs trimming but GM plans to launch nine new models this year.

Leave a Reply

+ 3 = 7