After the auto bailout of GM and Chrysler, General Motors posted a profit for the first quarter of 2010. It is the first time the company has posted numbers in the black since 2007. GM recently repaid a portion of the auto bailout it was lent and is thought to be on the path to profitability. Ford Motor Co. also posted recent gains, so it seems auto companies are getting back on track, though they still have plenty to repay from the emergency loans they received from taxpayers.
GM posts profits for first quarter
For the first time since 2007, GM has posted a first quarter profit. The New York Times reports that GM recorded a profit of $ 865 million. It posted revenues of $ 31.5 billion, and cash flow about $ 1 billion in the positive. It’s an overall positive sign for the beleaguered car maker, who previously had to ask the government for more than $ 50 billion in assistance. One year ago, the company posted losses of $ 6 billion.
Repayment has begun
Last month, GM made payments on part of the loans made by the Treasury. The loans GM and Chrysler received were bundles of loans, and GM has paid off one of the portions years before the due date. GM Chief Executive Ed Whitacre hailed it as a victory, as GM repaid $ 8.2 billion to the US and Canadian governments.
Not out of the woods
Though GM has returned to profits, the company is still in debt. The US and Canadian governments lent over $ 50 billion to GM. They are making great progress, but still have a ways to go. At present, the US Treasury still owns more than 60 percent of GM, and those ownership stakes can only be bought by stock offering when the company goes public again. They intend to make a public offering by the end of year.
Citations
New York Times
http://www.nytimes.com/2010/05/18/business/18auto.html?src=mv
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