Two years after a wounded General Motors returned to the stock market, the symbol of American industrial might is thriving again.
Sunday marks the anniversary of GM's initial public stock offering in November 2010. The company has made money for 11 straight quarters, piling up more than $16 billion in profits. Its cars and trucks are selling for good prices. And sales are strong in China.
But there are signs of trouble. GM's US sales, the prime driver of its profits, aren't rising as quickly as the overall market. There's been turmoil in the executive ranks, and the company is hemorrhaging cash in Europe.
Since the IPO, here are GM's achievements, struggles and question marks -
BIG PROFITS:GM is making money - nearly $4 billion so far this year. Most of that came from the US, where GM cars and trucks are selling for almost 6 per cent more than they did in January of 2011. The average selling price is $32,662, says the TrueCar.com auto pricing site. GM also is making good money in China and the rest of Asia, and it has turned around its money-losing South American operations with a host of new products.
BETTER CARS: Before its 2009 bankruptcy, GM relied on trucks and SUVs to make money. Cars were an afterthought, and GM got a reputation for poor quality. The business model worked fine until gas prices spiked over $3 per gallon around 2005 and buyers shifted toward cars. Since bankruptcy, the company has rolled out new compact, subcompact and mini cars that are selling well. Car-based crossovers, which are more efficient than traditional truck-based SUVs, also are selling. Trucks accounted for 32 per cent of GM sales in 2008, with cars and crossovers making up 68 per cent. Now, trucks are down to 27 per cent. Sales of the Chevrolet Cruze compact are closing in on 200,000 through October, far better than GM's previous compact and a strong counterpunch to Toyota and Honda. Also, the Chevy Sonic, the only subcompact made in the US, has become the top car in its segment with more than 70,000 sales this year. That's more than 10 times the number of subcompacts that GM sold in the first 10 months of 2011.
CASH PILE: GM, which nearly ran out of cash at the end of 2008, ended the third quarter with $31.6 billion in cash and securities. Bankruptcy wiped out old GM's debts and burdensome contracts, and the new company's cars and trucks have sold well around the world. The cash allows GM to invest in products and restructuring. It even bought a US auto finance company, which helps it to offer low-interest loans and cheap leases. GM also is bidding for international assets of Ally Financial, GM's former finance arm, to help make cheap loans in Europe and elsewhere. Early in November, GM took out $11 billion in new credit lines, giving it access to more than $42 billion. The giant figure leads many analysts to believe that GM is preparing to buy back at least part of the US government's 26.5 per cent stake in the company.
NEW LINEUP: As it headed into bankruptcy, GM cut spending on research. So for much of the past two years, the company had few new models to offer. But now it's flush with cash and spending millions to update or replace 70 per cent of its North American lineup by the end of next year. That includes much-anticipated full-size pickup trucks, which pull in big profits. Cadillac also is getting a makeover with the new full-size XTS and the ATS, a small luxury sport sedan designed to compete with the BMW 3-Series, a top-seller in the luxury market. Buick gets the Encore small SUV, while Chevy is getting an all-new Impala big car as well as a new Malibu midsize car.