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GM Starting to Show a Profit for First Time in Three Years

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On: Thu, May 20, 2010 at 9:50AM | By: Michael Jon Lazar

GM Starting to Show a Profit for First Time in Three Years

I am sure that most of you can recall a few years back—during what were perhaps some of the most tumultuous times for our US economy—when the Big Three (well, Chrysler and GM . . . not so much Ford) automakers went belly up. There was a rash of emergency meetings down in Washington, where the bigwigs from the major automakers plead their case for bailout funds to US Congress. They basically were asking for billions of US dollars in aid, from taxpayers and bonds, and some other methods of funding, like short term loans from the government. Many people saw this ‘auto bailout’ as tantamount to the housing market collapse, in the sense that there was much bickering back and forth as to whether we should have  bailed out the automakers, like General Motors, as we did.

But as it turns out, sometimes foresight is worth a few billion dollars or so. According to some recent news reports that have been surfacing and flying all over the web, GM is indeed once again a profitable entity. This has not been an easy task for the once gigantic automaker. They had to negotiate with unions. They had to close down numerous plants. They had to entirely readjust their budget. They had to eliminate some models. And the best part of all: they did these things and are making money again. GM looks to be in the driver seat to get us taxpayers finally paid off over the years to come. Hooray!

According to a recent report by the BBC, “US car giant General Motors has reported its first quarterly profit in nearly three years.”

That is really good news! Because it does mean that they are coming back. It does mean they have been making good on their promises to become profitable again. And it really does aid in the overall revival of the company image and their brands. In case you are wondering about some of the models they ditched to do this, they include popular car lines that the company used to manufacture: Saturn, Hummer, and Saab.

According to the BBC news report, the company is poised to exit bankruptcy protection sometime in late July. But they are not out of hot water as of yet. The report also sheds some insight as to what the real scope of GM’s debts are.

The report said that, “GM, which owns the Vauxhall and Opel brands, still owes $45.3bn to the US and $8.1bn to Canada, money it received when the US and Canada took large stakes in the company.”

However, they are still making money, and turning a profit too. According to the BBC, “Sales at GM rose to $31.5bn in the first three months of the year, up from $22.4bn in the first quarter of 2009.”

For any of you out there who may have been wondering if GM would ever make it out of the bind they are in: The outlook is pretty good! The car company also has really ramped up their image as of late, too. And the incentives to get into a new GM car have never been as sugary and sweet as they are now.

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