GM posts £920m profit in Q3

Posted on 31 Oct 2012 by Tim Brown

Aiming to eliminate £1.11bn European loss by 2015

General Motors is the third car company this week to post strong third quarter global profits despite admitting it would make losses in Europe of up to $1.8bn (£1.11bn) this year.

The company said it was targeting a return to break-even levels in its European operations by mid-decade.

GM’s third-quarter net income was to $1.48bn (£920m), down from $1.74bn (£1.08bn) a year earlier while revenue rose $100m to $36.7bn (£22.78bn).

GM said it expected a full-year operating loss of up to $1.8bn (£1.11bn) in Europe, depending on the level of restructuring in the fourth quarter. Last year, it lost $747m (£463m) in the region.

“GM had a solid quarter because customers around the world love our new vehicles and we’re also seeing green shoots take hold on tough issues like complexity reduction, pensions and Europe,” said Chairman and CEO Dan Akerson. “We are going to keep playing offense with growth products like the Chevrolet Onix, Opel Mokka and Cadillac ATS and continue to systematically address business risks.”

The company, which sells in Europe largely under the Opel brand name and Vauxhall in the UK, said it was targeting results there to be slightly better in 2013 than in 2012 and to reach break-even by mid-decade.

GM still sees the European economy as flat to slightly deteriorating. “We’re not banking on a sharp turnaround … at this point,” Ammann told reporters on a conference call.

Senior Vice President and CFO Dan Ammann added, “While we still have a lot of work to do, especially in Europe, it is encouraging to see our results begin to reflect the discipline we are bringing to bear on the overall business.”

Opel has been a drag on GM’s results, leading the automaker to push for changes at the European unit, which has lost a total of $16bn (£9.9bn) over the past 12 years despite repeated rounds of job cuts. In the third quarter, GM Europe posted an operating loss of $478m (£296).