GM says latest numbers show it’s on right track
General Motors Co. said Monday that it lost $1.2 billion from the time it left bankruptcy protection through Sept. 30, far better than in previous quarters and a sign the auto giant is turning around.
The company also said it will begin repaying $6.7 billion in U.S. government loans with a $1.2 billion payment next month. It plans to repay the debt over the next eight quarters, but could pay it back as early as next year. But the money will come from funds loaned by the government.
GM said its performance was fueled by new products including the Chevrolet Camaro, and the Chevrolet Equinox and GMC Terrain crossovers. Top sellers were the Chevrolet Silverado pickup and Impala full-size car.
The better showing also reflected lower debt payments. The automaker paid $250 million in interest for the latest period, far lower than the $1.1 billion it had to pay in the first quarter, before it went into bankruptcy protection. Before Chapter 11, GM was weighed down by a huge debt of almost $95 billion that has since been cut to $17 billion.
"We have significantly more work to do, but today’s results provide evidence of the solid foundation we are building," CEO Fritz Henderson said.
The company cautioned that the numbers mean little because they don’t comply with U direct lender payday loans.S. accounting standards and cover only the part of the quarter after GM left bankruptcy July 10.
More unusual is the $79.4 billion profit for the first nine days of the third quarter, when GM remained under protection but was able to scrap colossal amounts of debt and other obligations.
GM took in $3.3 billion more cash than it spent in the third quarter, far better than the $10 billion it burned through during the first quarter.
Third-quarter revenue was $26.4 billion, an improvement over the first quarter when revenue dropped 50 percent to $22.4 billion from a year earlier.
Although GM reported positive cash flow for the third quarter, it does not expect that to continue into the fourth quarter because of the government loan repayments and a $2.8 billion payment to help Delphi Corp., its former parts division, out of bankruptcy.
GM has said it plans to sell stock to the public late next year so taxpayers can recoup at least part of their remaining investment.
Filed under: technology by Fred