GM Back to Profitability by 2011?

General Motors is said to get back to profitability as soon as 2011, the American manufacturer mentioned in court papers. Furthermore, Evercore Partners, the company's financial adviser expects GM to increase worldwide production from 3.8 million to six million by 2014, reported today.

However, GM's CEO Fritz Henderson said just after the bankruptcy filing was confirmed that going back to profitability is the main goal of the company but nobody can know for sure the year when this will happen.

"Actually, there were a couple questions in the front which I realize in retrospect I didn't answer. Let me pick up one, which is this one on profitability. One of our objectives, we're not sitting here today, we've got so much work to do, we're not in the business of picking which quarter we're going to become profitable. The issue is getting the breakeven down to about a 10 million unit level EBIT, earnings before interest and taxes, and to execute our plan through 2009 to get our self to that point," Henderson said last week.

Meanwhile, The General is still struggling to complete the sale of Saab, the Swedish brand which was put on sale earlier this year. Additionally, we are days away from seeing General Motors giving up on Saturn, with Penske Group now seen as favorite to takeover the American manufacturer.

But General Motors will always be focused on its domestic operations, as exiting from bankruptcy and re-become competitive are the two main goals on the table.

"So that doesn't mean we're profitable, obviously, because if you're breakeven at EBIT, you're not in a profitable position, but nonetheless the risk to the Company will be substantially less than it was before, and the upside will be substantially better to the extent the markets improve. As opposed to trying to guess what the volumes will be in any given quarter, the focus will be getting the breakeven down, so we're as robust as we possibly can be for different economic environments," Henderson said.
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About the author: Bogdan Popa
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Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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