GM will return to North American profitability by 2010 or 2011, a new report finds. GM lost $38.7 billion in 2007 — mostly due to certain tax assets — but the automaker’s landmark deal with the UAW and capacity reductions should allow GM to turn a North American profit within three years.
“In order to get North America sustainably profitable and generating cash, we need to win in the market and rein in costs,” GM CFO Fritz Henderson told Automotive News. “We need to step on the gas on how we are performing in the market.”
GM’s worldwide automotive operations were actually profitable in 2007 — earning $553 million — but GM lost $1.5 billion in its biggest market, North America, in 2007. However, the recent deal with the UAW — which could save the automaker about $1,000 per vehicles — could turn that around by 2010 or 2011.
Today GM offered a buyout to all 74,000 of its hourly UAW workers, but it remains unclear how many will take the deal. “Looking at the situation, we don’t really know what the take rates will be,” Henderson said.
