DETROIT — 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 U.S. 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 and struggles.
ACHIEVEMENTS
Big profits: GM is making money – nearly $4 billion so far this year. Most of that came from the U.S., where GM cars and trucks are selling for almost 6 percent more than they did in January 2011.
Better 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 percent of GM sales in 2008, with cars and crossovers making up 68 percent. Now, trucks are down to 27 percent. 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.
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 GM’s old 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.
New lineup: The company is spending millions to update or replace 70 percent of its North American lineup by the end of 2013.
STRUGGLES
Stock price: Shares of GM sold for $33 when the company re-entered the stock market on November 18, 2010. For a few months, everything looked good. In July 2012, they hit a low of $18.72, weighed down by a slowing U.S. economy and troubles in Europe. They’ve recovered some since, but are still almost 30 percent below the IPO price.
GM shares would have to sell for $53 each for the government to break even.
U.S. market share: GM’s share of the critical U.S. market has dropped to 18 percent from 22 percent since the end of 2008. That means rivals such as Toyota are taking away some buyers.
Europe: GM has lost $16 billion in Europe in the past 12 years, but it’s trying to resuscitate the business with cost cuts and new products. CEO Dan Akerson said this week that European operations are making progress toward profitability and he expects them to break even before taxes by the middle of this decade.
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