AFSCME 3357-HOF'S BLOG

GM Earns almost $1 Billion in 2nd Quarter

GM's cost-cutting is starting to show on the bottom line, as the company reported its third consecutive quarter of positive earnings. The earnings for the 2nd fiscal quarter of 2007 were $891 million, as compared to a loss of $3.4 billion in the same quarter of last year.

GM's earnings were decreased by a $341 million bail-out of Delphi. Although some analysts expected GMAC to post a loss due to the subprime mortgage market, GMAC posted a $239 million profit, an amount roughly equal to 1/3 of last year's finance profits. GM sold off 51% of GMAC last year. The $239 million gain (apparently) represents GM's 49% share.


GM was profitable virtually everywhere but North America. Still, the North American loss, at $49 million, is fairly minor statistically.

GM's overall revenue shrank to about $47 billion, compared to $54 billion last year. GM's market share shrunk to a little under 23% in the North American market.

These results came in during the early stage of contract negotiations with the UAW. Ironically, a loss might have helped GM at the bargaining table. The fact that GM posted a narrow profit may help stave off the termination of legal services coverage for the remaining UAW members. Source: Detroit News