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GM’s North American operations to be profitable by 2010 or 2011

02/13/2008, 12:03 PM

By Drew Johnson

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.

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02/13, 12:17 PM

posted by:

CA36GTP

Bye bye, UAW! Let someone else deal with your vampire leech bull****.

02/13, 12:22 PM

posted by:

Xile

The unions were part of the problem but the real problem was ****ty products and high oil prices.

02/13, 1:06 PM

posted by:

injunraiv

Xile, they were no more ****ty than any of it’s competitors products, no matter what Consumer Reports or 1115 says.

02/13, 1:17 PM

posted by:

Madcapp

They had ample warning to stop building crap and start making good cars.

02/13, 1:29 PM

posted by:

johnnycanuck

While I’m sure those of us not in the UAW or CAW are all happy enough to cough up a golden furball on our respective self administered pension plans after this proclamation, this does not make the unions go away. This is likely just going to make them even less joyous.

What mystifies me is how GM ended up with so many employees to begin with. When in recent memory were times that good that they had to build up such a huge workforce? Correct me if I’m wrong, but hasn’t their market share been eroding for years?

02/13, 1:30 PM

posted by:

DrFill

I see some very enlightened commentary from people who haven’t driven GM’s before 5 years ago.
GM is to commended for their RECENT turnaround in quality, design, and styling.
Having said that, the fact that they have mor eor less lost their leadership in car production, with more capacity and more car companies than any other, speaks to a general dissatisfcation with GM.
GM cars have been mediocre at best, and only recently are showing promise.
GM does work with a disadvantage of cutting bad union deals, a fault of their own doing.
More importantly, they suffer from poor planning, poor leadership, and losing touch with their customer base/market conditions.
GM will make money in 3 years.
Ford will make decent engines in 3 years.
Chrysler will be more efficient in 3 years.
Many people are just sick and tired of being sick and tired.
It’s Toyota’s time now.
And they can thank the domestics just as much as their own considerable effort.
Thank you.
DrFill

02/13, 2:57 PM

posted by:

cookie4me

Buy now because I doubt they can avoid a drop in quality (for whatever brief period of time) by turning over so many workers.

02/13, 3:09 PM

posted by:

Xile

I just want to clarify one thing. I really like the stuff GM/Ford are putting out lately. As far as quality is concerned, I don’t think there is currently that much of a difference between them and the Japanese. But I’m talking about my experience a few years ago. You can’t tell me that GM/Ford quality was as good as the Japanese and the products were bland. And everything isn’t the union’s fault. Doesn’t management deserve most of the responsibility? They are the ones in charge right?

02/13, 3:23 PM

posted by:

corvette

go GM.

02/13, 4:03 PM

posted by:

injunraiv

Xile – assertations of crap is different from mediocre. For years I’ve had nothing but good luck from my GM products. Sure, a minot problem here or there, but nothing that wouldn’t have happened with a car from another maker.

I think there are many factors in the domestics slide, and not all of them are their fault. However, I do believe the union stranglehold on Detroit was not a good thing, whether or not it was as big a factor as others seem to think.

I guess I’m just tired of people talking trash about American workers and manufacturers…

02/13, 4:09 PM

posted by:

Get Real

THEIR SECOND MOON SHOT…..HERE AND NOW !!!!!

02/13, 4:43 PM

posted by:

SS4LIFE

It’s going to take some time, but GM and eventually Ford and Chrysler will return profitable in the next few years but definitely GM before the other domestics. While a lot of this is GM’s fault and while many people think I may be a big defender of GM, from owning their products all of my life, and having to put up with some of the bs they’ve given me, I understand why a lot of buyers moved away from GM and that is certainly GM’s fault. However they are turning around, and their latest cars are really turning out well.

02/13, 5:27 PM

posted by:

C6Racer

Sorry “Dr.” Fill. Toyota sucks just as it always has. I’ve never had any good experiences in one. $3k head repair because of a burnt exhaust valve in a ‘91 4Runner, plastic bits just falling off randomly and broken window motors on a ‘98 Camry, and $1k repair for mushroomed valve stems on a 2000 Tacoma 2WD I-4. Yep, they’re perfect alright.
Besides the tailgate cables on my 2000 Sierra, only the headlight switch has given me problems so far. I had to think for about 3 mins just to remember something has gone wrong.

02/13, 6:02 PM

posted by:

DrFill

I know speaking the truth here is like pi$$ing in the wind, but the facts remain.
No one said Toyota is perfect.
No one is saying GM is crap.
But GM has had their time in the sun, and now it’s over.
They have to hustle, and sweat, and work, and learn about what their customers really want/need.
They have as much ability as Toyota, or anyone else. Maybe more.
My question to you is what happened before 2002?
Where was all of this sudden interest in the customers before now?
GM needs to rebuild it’s name, which it spent a generation destroying.
I WANT to love GM. We all do. But we all WON’T.
GM has a lot to learn, and has a lot of respect to earn.
I wish GM all the best.
Unlike Ford and Chrysler, they’ve shown an interest in competing with the best.
DrFill

02/13, 6:05 PM

posted by:

DrFill

And C6Racer
You KNOW BETTER than to compare quality records with Toyota.
Sorry you had a tough time, but you KNOW you are an exception, not the rule.
Let’s keep one foot on the ground.
DrFill

02/13, 10:51 PM

posted by:

autonut

Didn’t you guys read the link on this blog to article to “myopians in Detroit” by Brook Yates? It was very good article and it basically sums up GM and Ford management: ass holes in exquisite houses and offices with their heads berried in their rectums. I am surprised LLN censors did not yanked the link before I could read it. They sure yanked plenty of my posts that are disparaging to their client (I understand that – they got to eat).
Those jack asses are running companies into the ground, destroying people livelihood and making millions in the process. What qualities Lutz demoed to make that kind of scratch? At least his co-conspirator finished Harvard business school.
This article is quite pessimistic: there will be losses for 2008, 2009, 2010 and perhaps 2011. Who can say for sure that 2012 will have great economic outlook and price oil will drop to 1998 level so we can all drive Suburbans with 10 mpg?

02/13, 10:55 PM

posted by:

jdasch1

Jim Cramer with CNBC and host of Mad Money said yesterday that GM by 2010 would be a NON-UNION company. LLN needs to follow that prediction with some news story about it. He predicted that GM is poised to take back the lead from Toyota and have massive profits from 2010 on.

02/14, 1:41 AM

posted by:

AxeHead

GM needs to keep at quality in production and in promotion to head off Toyota. Nothing else will suffice. People buy Toyota’s and Honda’s over GMs because (percieved or real) they believe the car will not let them down, will last a long time, and will hold it’s value. Some of them (me included) had bad experiances with domestics and even if that’s a long time ago – it’s hard to change real life experiance. Quality boys – Reliability – Value…thats the ticket.

02/14, 9:50 AM

posted by:

DrFill

The only thing going down the toilet is your posts.
DrFill

02/14, 10:45 AM

posted by:

SwerveEarly

Where have all the car enthusiasts gone?

02/14, 10:42 PM

posted by:

Get Real

^^^We’re still here.

We just wish GM would spend the money they have left on good products, cool cars that make people want to own a GM car again.

Stop wasting money on H3’s and concept cars they will never ever build.

Stop letting engineers design cars and let art students into the company.

The spirit of Harley Earl would be proud.

02/20, 10:07 AM

posted by:

jackjimturkey

I like to play “Master of Puppets” on an explorer, but I like to play the solos on a Flying V. The classical “Bridge” part is a good time to make the switch,but after the solos, it goes right back into the main riff.
What to do?
I have been just finishing the tune with the Flying V.

 
 
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