General Motors growing stronger
Company reports more profits, and improvements on the way.
General Motors has some good news for everyone, as the company's shares rose Wednesday on predictions of stronger profits and improved performance around the globe. South America posted exceptionally large profits for the company, while improvements in Europe look promising.
General Motors expects the European unit to improve and become profitable within the next few years.
South America had a particularly good sales season, turning around from a loss of $44 million last year to a profit of $114 million this year.
Europe and North America continue to be weak spots for the automotive giant but GM says they have taken steps to improve the situation there. Operations in Europe have since been optimized with about 2,600 employees retiring or leaving the company and new savings of up to $300 million between workforce reductions and product line cuts.
The company says more cuts may happen if needed, depending on sales.
Investors are happy that GM is resolved to fix some of its problems and is now enjoying a healthier outlook. As a result, investor confidence in the company has grown.
The company's shares were up to $24.89 in early morning trading on Wednesday.
General Motors also intends to bring new, more appealing vehicles and products to market, particularly in Europe, which remains a soft spot for the company. Although GM is predicting losses in Europe for next year, the outlook is improving with those losses projected to minimize, then turn to profits within the next three years.
The company isn't simply looking at cost reductions either. Added to the cost cuts are reduced inventory, and new leadership. Some 23 new models of vehicles and 13 new engines will be on the market by 2016.
Certainly, not all of GM's troubles in Europe can be blamed on the company's product line and management. Europe has endured the worst recession since the end of World War II, and the markets are soft as people try to stretch their money.
Governments are also buying fewer vehicles as they struggle with national debts that must be brought under control.
Despite European austerity, GM is still projecting a return to profitability in the region by 2016.
Outside of Europe, the outlook is much better and overall GM is expected to remain profitable for some time to come, making investors, and workers alike, very happy.
© 2014 - Distributed by THE NEWS CONSORTIUM
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