GM Cuts Losses—Plans Early Loan Repayment

GM logo, General Motors logo
GM logo, General Motors logo

Almost 90 days after coming out of bankruptcy, General Motors is showing signs of getting healthy and moving closer to getting back in the black.

And there's no doubt, the "new" GM is doing far better than the old GM.

  • Cash flow was positive $3.3 Billion
  • Structural costs dropped $6.7 Billion
  • Starting next month, GM will repay $1.2 Billion of its $8.1 Billion in loans to the U.S. And Canadian governments

All encouraging signs. But critics will point out some other troubling signs at GM.

  • GM lost $261 before special charges
  • The company will have negative cash flow in the fourth quarter due to a number of factors, including the loan repayment.

All of which brings up the question: How much has really changed at GM?

Actually, quite a bit.

  • The company's global market share is up slightly to a total of 11.9 %.
  • In the U.S., consideration of General Motors vehicles is picking up.
  • China, which has become the #1 market in the world for auto sales, GM is not only holding the top position, it's in position to grow with that market.
  • The company moves quicker, and with more purpose than a year ago as it was sliding towards bankruptcy.

So what should we take away from GM's third quarter financial results?

This company is definitely in better shape than it was before bankruptcy and is better position to get back in the black as auto sales pick up. In other words, it's steady progress. Not spectacular, but steady.

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