General Motors Scores $7.6 Billion In 2011
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DETROIT (WWJ) – General Motors made $7.6 billion in 2011, its best annual profit ever. For workers, that means profit sharing checks averaging $7000.
“In our first full year as a public company, we grew the top and bottom lines, advanced our global market share and made strategic investments in our brands around the world,” said GM CEO Dan Akerson.
Still, many Wall Street Analysts were expecting an $8 billion dollar profit. GM Chief Financial Officer Dan Ammann said the company’s turnaround wasn’t finished yet.
“This year is a year of good progress from where we were to where we want to get to,” he said. “So, we’re far from done. There’s still a lot of work to do around here.”
INTERVIEW: WWJ AutoBeat Reporter Jeff Gilbert speaks with GM CFO Dan Ammann.
Ammann said that work included finding ways to leverage GM’s size to get more cost savings. General Motors profit margin is stll lower than most of its competitors.
GM’s fourth quarter was weak, with profits of $500 million. Ammann blamed that on seasonal issues. GM also lost $700 million in Europe and $100 million in South America.
GM earned $7.2 billion dollars in North America.
The 2011 earnings are significantly higher than the $4.7 billion profit that GM posted in 2010. They also improve upon GM’s previous all time high earnings of $6.7 billion in 1997.
Analysts say General Motors has come a long way since its 2009 bankruptcy.
“We’re starting to see the results of both the cleaned up balance sheets, the elimination of debts, the popularity of a lot of new products,” said Aaron Bragman of IHS Automotive. “It’s all pretty much coming together for them.”
For the most part, analysts feel that General Motors has been able to start doing the fundamental things right.
“2011 was a year of solid recovery for GM. The company increased its’ sales by over 13 percent, added a half of point of market share, increased average transaction prices by over $1,100, all while lowering incentive spending by 5 percent,” said analyst Jesse Toprak of Truecar.com. “The new crop of products from GM are helping to improve its’ brand image, resulting in a remarkable turnaround from what appeared to be a hopeless situation just three years ago.”
The $7000 profit sharing checks are the largest in GM history. They come as General Motors isn’t planning any across the board pay hikes for either salaried or manufacturing workers.
“We want everyone in the company to be aligned around the success of the company,” said CFO Ammann. “As the company’s successful, the employees will be successful.”
GM CEO Dan Akerson expects more success in 2012. He says the company will grow its “top line”, meaning it’s revenues. There were no promises of higher bottom line profits, because several new product launches will cost the company a lot of money.
“We will build on these results as we bring more new cars, crossoers and trucks to market, and make GM a far more efficient global team,” said Akerson. “Thsi includes reducing our break-even level in Europe and South America and driving higher revenues around the world.”