DETROIT (AP) â¿¿ Just two years after it was rescued and reconstituted through bankruptcy and a government bailout, General Motors Co. cruised through 2011 to post the biggest profit in its history.
The 103-year-old company, leaner and smarter under new management, cut costs by taking advantage of its size around the globe. And its new products boosted sales so much that it has reclaimed the title of world's biggest automaker from Toyota.
GM may have a hard time breaking this record in 2012 because it is losing money in Europe and South America, and U.S. sales growth slowed in the last three months of 2011.But the company's performance in North America and Asia still helped it earn $7.6 billion for the year, beating the record of $6.7 billion set during the truck boom in 1997. The profit won't stop the debate about spending $49.5 billion in taxpayer dollars to save GM. But it did drive up the company's stock price, which could help the government get more of its money back. The bailout of GM and Chrysler Group LLC, begun by George W. Bush and finished by Barack Obama, remains a major issue in this year's presidential campaign. It's so politically charged that even a Super Bowl ad celebrating Chrysler's rebirth caused arguments. GM, which released its earnings Thursday, performed best in its home territory, posting a $7.2 billion pretax profit in North America. The numbers were so good that 47,500 blue-collar workers will get $7,000 profit-sharing checks, the maximum allowable under their new union contract. International Operations, which includes Asia, made $1.9 billion before taxes, but that was down from 2010. GM's cost cuts, and its outlook for this year helped to push up the stock price by almost 9 percent to $27.08. The company said it trimmed costs by $500 million in the fourth quarter alone mainly by consolidating advertising agencies and engineering operations. A prediction that costs wouldn't rise this year wowed investors, especially since other automakers have forecast rising costs, said Itay Michaeli, an analyst for Citi Investment Research.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV