General Motors’ stunning rebound

What did he know and when did he know it? For President Obama, that question isn’t about a scandal like Watergate, but about General Motors’ profits.

When the commander in chief came to visit GM and its smaller domestic rival, Chrysler, earlier in the month, did he know just how big the numbers would be for the second quarter? They certainly would have made it even easier to understand his seeming victory lap of Detroit, barely a year after the two manufacturers emerged from Chapter 11 protection.

While the numbers were nowhere near an industry record, the humbled giant still managed to put $1.3 billion in the bank, a whopping $14 billion swing from the second quarter of 2009. The turnaround is all the more dramatic when one considers that GM’s renewed profitability comes at a time when the United Auto Workers remains deep in the doldrums. Despite a modest upturn from last year’s ghastly numbers, 2010 sales are just about the worst the industry has seen since the Great Depression.

Full story: General Motors’ Stunning Rebound: Paul Eisenstein Reports – The Daily Beast

  • relayer10

    Say what you will…Whitacker did a good job with what he had. Here is the telling part. GM wantes to release an IPO. If a company is ready for that, it can be a good thing. If the company is NOT ready, it can mean disaster. When a CEO disagrees with their board on a decision like this…typically they resign rather than be a dissenting voice, once the action is taken.

    Whitaker resigned on Friday. I wonder why?

  • Major_Skidmark

    Socialism…. 41k 40 miles on a charge. (Volt)
    Free Market.. 32k 100 miles on a charge. (Leaf)
    Any questions?

  • wire-paladin

    the Volt appears to be the GM version of the Edsel, it should be a very expensive collector’s item. government manufacturing, and marketing at its best!

  • truebearing

    I will never buy another GM car. I’ll buy a Ford, since it is the only American auto company left.

    Now that GM is making some money, why aren’t the secured bondholders that got ripped off getting reimbursed? That whole thing was Marxist highway robbery. If Americans buy cars from Government Motors they are participating in a grave injustice, and crime, against investors who were blatantly robbed in broad daylight.

    There is a huge flaw in this alleged resurgence of Government Motors: China is developing its own auto manufacturing, and it won’t be long before GM won’t be selling diddly in China.

  • Major_Skidmark

    We spent a pud-load of taxpayer money to bail out the union bosses. They made promises to their member that they could not keep. The Gov’t just delayed the inevitable. I have always owned GM cars. I can not bring myself to buy another.

  • Dafney

    I won’t buy their cars. The volt cost $80,000 to manufacture and sells for $40,000. Besides that, an electric car is old technology. We were driving cars in the 50’s-60’s with the same technology and gas mileage we have today. All other technology has jumped hundreds of years — everything EXCEPT cars. We should be driving SPACESHIPS by now. All the patents for air and water driven cars has been kept hidden from the public all these years to promote OIL. Now, GM touts an ELECTRIC CAR just when they decide to TAX us on our “carbon footprint” or VOLTAGE USED. We have a whole government of JERKS, to include GM!

    And GM did NOT pay back it’s loan. It borrowed MORE taxpayer money to pay the loan, so the loan from TAXPAYERS is still outstanding.

    • Richard Hamilton

      @Dafney: “All the patents for air and water driven cars has been kept hidden from the public all these years to promote OIL.”

      LOL. All cars that burn oil (or any other fuel) are air powered,
      in the sense that it’s air _and_ fuel that react to release energy.
      Otherwise you’d have to carry your oxidizer around, like a rocket

      (Lithium-air batteries are possible, which use oxygen as one
      of the reactants, and offer the theoretical possibility of
      impressive energy density. And there is work on those in
      progress for automotive applications. But the gap from theory
      to practice sometimes turns out to be impractical…)

      Water is in a pretty low energy state already…most of the claims
      of running cars off of water are scams. You can:

      * use electricity to split it into oxygen and hydrogen, and
      then either recombine them in a fuel cell, or burn the hydrogen,
      to release energy. The problem is that storing hydrogen safely
      and compactly is difficult; it’s the most efficient fuel by weight,
      but the least efficient by volume.
      * use water as a working fluid (steam engine).

      Neither of those use water instead of fuel, though. Even the
      former requires some other energy source to break down the
      water into hydrogen and oxygen. One could use a
      platinum catalyst and sunlight, but it wouldn’t be practical
      on any reasonable scale, being too slow, requiring additional
      energy to compress the hydrogen, and because platinum is
      very expensive.

      The sad fact is that liquid hydrocarbon fuels (whether fossil or
      more recently biological in origin) are about the easiest and
      cheapest way to put a lot of energy into a space roughly
      the size and weight of a gas tank, and to do so as quickly
      as one can fill a gas tank.

      If something clearly better were available, _and_ the
      chicken-or-egg problem of having both vehicles and
      widely available refueling in place at the same time (who
      is going to spend all that money first, when each is
      useless without the other?) were solved, it would be there
      already! It will happen eventually, but whining about
      nutty conspiracy theories won’t get it done any faster.

      Real conspiracies are usually relatively boring, and much
      smaller, or they’d attract too much attention to be successful!

  • jackphat

    When GM ditches the economically destructive unions then maybe I’d buy one of there cars. And maybe not.

  • philipjames

    Lets see… if I had a company with tons of debt, a huge unfunded pension liability and union workers getting paid way too much… what could give me a “stunning rebound”?

    Well, first I would screw all the secured creditors…. nothing for them. Screw off all of you, I have the government to break the law and ignore centuries of law and stiff you. But I will pay off my friends I owe money to. I will get billions from the government (the taxpayers) to fully fund my pension liabilities and not lay off any workers. I will close the dealerships of any Republican dealers and keep the ones that are owned by political friends. I will continue to pay my union workers with more taxpayer money. And, I will get the government (the taxpayers) to invest in preferred shares at a massive discount while screwing previous preferred shareholders and common stock holders.

    Then I will brag how well I am doing now…. in my new socialist paradise.

    • NeoKong

      It’s easy to succeed on unlimited free money.

  • jiminga

    I wonder how much interest GM would have paid on a $50 billion dollar loan. Since the government “investment” was interest free, I’m sure the results would have been very different if GM were reporting like a public company. After the IPO and repayment of our dollars (maybe) it will be interesting to see how long before this zombie company fails again.

  • rexcampbell

    Guess I must have missed the explanation. What, in words that someone who is not in the car business can understand, is GM doing today with OUR money, that they weren’t able to do yesterday with THEIR money?

    • emem

      Well, they were able to change the rules and not pay-off the bondholders. They are able to have UAW members on the Board. They are able to exempt UAW from Obamacare taxes and fees. They are able to shift their financials around as Whitacker did when he announced in an ad (which was quickly removed) they’d paid taxpayers back. Avoid bankruptcy. Maintain governmentesque benefits like all of their retirement programs, cadillac (no pun intended) insurance plans for current and retired employees. Continue development on a $40K electric that goes 40 miles. Keep factories running. Continue golden parachuting execs. And now GM advertises a buick with German engineering that’s really an Opel?

      Meantime, Ford, didn’t take a dime as they had a plan to sell assets like Volvo, Landrover, Jaguar and renogtiated UAW contracts.