Resurgent General Motors posts 2010 profit of $4.7 billion dollars
DETROIT — 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 GM, which became publicly traded in November, ending a string of years in which losses totaled about $90 billion.
The improvement was a result of eliminating debt during and after bankruptcy and years of effort at reducing factory output, cutting labor costs and developing more enticing cars and trucks.
As a result of its performance, GM said 45,000 union workers would receive profit-sharing checks averaging $4,300, the most ever.
“Last year was one of foundation-building,” GM’s chief executive, Daniel F. Akerson, said in a statement. “Particularly pleasing was that we demonstrated GM’s ability to achieve sustainable profitability near the bottom of the U.S. industry cycle, with four consecutive profitable quarters.”
Akerson also expressed confidence in GM’s ability to withstand pressure from oil costs as growing violence in the Middle East drove up prices.
When prices surged in July 2008, peaking at $145 a barrel, GM suffered badly. Sales plunged 27 percent at a time when the automaker was laying off workers and cutting costs to try to stay solvent.
This time, executives and analysts say the company should have a much different outcome.
“We were concerned about this well before it was on the front page of any paper,” Akerson said on a conference call. “By the end of this year, we’ll have four really good entries in the compact segment with high-mileage models. We’re hitting North American with the right products.”
Those products include the Chevrolet Cruze, a compact car that was a vast improvement over the poorly rated Chevrolet Cobalt, which GM offered in 2008, and the Chevrolet Volt, a plug-in hybrid car.
This year, it will introduce the Chevrolet Sonic, its first U.S.-made subcompact, and the Buick Verano, an upscale adaptation of the Cruze, whose highway fuel economy can top 40 mpg.
GM has also had such high demand for crossover vehicles like the Chevy Equinox that it has struggled to make enough of them.
“There’s no problem in the car business that good products won’t fix, and they’ve had a good run of products,” said James Bell, executive market analyst with Kelley Blue Book, which provides car-buying information.