Last Updated:September 1 @ 05:27 pm

GM profits fall 41%, blamed on Europe

By Tom Krisher

DETROIT (AP) - A big loss in Europe dragged down General Motors' second-quarter profit.

The automaker's net income from April through June fell 41 percent to $1.5 billion, $1 billion less than the same quarter a year earlier, GM said on Thursday.

A $361 million loss in Europe, coupled with $19 million of red ink in South America, pulled down strong performances in North America and Asia. In last year's second quarter, GM made $102 million in Europe before taxes.

European nations are struggling to contain a debt crisis, weak economies and high unemployment, which have sapped car buying in the region.

Even North America, GM's profit center, showed weakness. Pretax profit fell almost 13 percent to about $2 billion. International operations, which include China, saw pretax earnings fall 3 percent to a $557 million.

Overall revenue slipped 5 percent to $37.6 billion.

The company's overall profit was better than Wall Street expected. GM earned 90 cents per share, compared with 75 cents forecast by analysts.

Shares rose 9 cents to $ 19.75 in early trading Thursday.

Chief Financial Officer Dan Ammann wouldn't predict when GM would make money again in Europe, saying it was largely dependent on the broader regional economy.

"We don't know exactly how that's going to unfold," he said.

GM is restructuring in Europe and has an array of new vehicles coming out this year and next around the globe. Ammann said that's reason for optimism.

"That makes us feel good about the general prospects for the business going forward," he said.

Still, the company predicted that its third-quarter North American pretax profit is likely to be below second-quarter results.

GM's European sales, which include mainly the Opel and Vauxhall brands, fell 7 percent to 454,000 vehicles during the quarter as several countries went into recession and government debt problems scared away buyers. But Ammann said GM was able to keep its prices relatively steady as people paid more for new models, offsetting discounts on older models.

Earlier this month GM replaced its European CEO and added three outsiders to its management team there, including two from Volkswagen, the region's top automaker.

In North America, Ammann said he wasn't worried about the slip in pretax profits. During the quarter, the company shifted its salaried pension plan to an insurance company annuity, and that cut pension income by about $200 million. GM also cut truck production during the quarter as it readied for all-new models in 2013, and that affected income, Ammann said.

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23 Comments

  1. Ollie_FanComment by Ollie_Fan
    August 2, 2012 @ 4:23 pm

    Ahhh, union ownership at it’s finest. Stay classy UAW…

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    • johnlockeComment by johnlocke
      August 2, 2012 @ 4:34 pm

      FTA

      The company’s overall profit was better than Wall Street expected. GM earned 90 cents per share, compared with 75 cents forecast by analysts.

      You seem to be rooting against GM. Is that true?

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    • dshevlinComment by dshevlin
      August 2, 2012 @ 4:52 pm

      Government Motors and it’s government unions wasting tax payer money to do business as usual. Only the government would take a 41% decrease in income and “feel good about the general prospects of business going forward”. LOL… what a crock of kaka. Yes JohnLocke, we are rooting against them. China owns most it now anyway fool. Chevy Camaro is made in CHINA. Not American any longer. AND it was a short sale to boot! Your prez told ya they paid back their loans, remember? Well it was a partial truth, they sold for less then the mtg. amount and paid back only part of the loan and were released from the balance of the loan. So come again…. why?…. are you rooting for them?

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    • johnlockeComment by johnlocke
      August 2, 2012 @ 7:32 pm

      Rooting for GM to fail is pure partisanship. GM is still an American company that employs thousands of Americans directly and indirectly. It is also running a profit. Why do you want it to fail? Because you hate the president so much?

      Made in China? Over 60% of a Camaro’s parts are made in US and Canada (according to the window sticker).

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    • dshevlinComment by dshevlin
      August 2, 2012 @ 7:57 pm

      @JohnLocke – GM is NOT an American company any longer. The jobs are in CHINA, the cars are made in CHINA. CHINA advertises them now. The cars look Chinese now too. IT IS NOT RUNNIBG A PROFIT. Did you just read this article?? 41% DECREASE in income. That means a LOSS. The “profit” in April or May was obummer buying fleets of them to show sales. The federal gov. now has fleets of GM cars sitting somewhere. No window sticker lists where the parts are made fool. Nice try.

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    • johnlockeComment by johnlocke
      August 3, 2012 @ 7:06 am

      Quoting from a different article that can be found here:
      http://articles.cnn.com/2008-12-12/us/american.cars_1_foreign-brands-dutch-mandel-american-car?_s=PM:US

      ‘”When you think of buying American, you should focus on three points — its engine, transmission and where it was assembled,” Klier said.
      To get that information, read a vehicle’s window sticker. U.S. automakers are legally required to detail the origin of a car’s parts and its final assembly point.
      “Unfortunately, there are few people who know about the sticker or even bother to look at it,” said Bernard Swiecki, a senior project manager at the nonprofit Center for Automotive Research in Michigan, which follows trends in the industry.’

      As far as GM running a profit, it clearly says they did in this article. I quoted that in my first post.

      Do you have any evidence that the US is stockpiling GM cars?

      Thousands of your American brothers and sisters derive their livelihood from GM. These are hard-working, tax-paying Americans. You’d like to see them and their families suffer? You are rooting for this?

      It seems that your hatred for President Obama is stronger than your love of this country.

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    • dshevlinComment by dshevlin
      August 3, 2012 @ 10:16 am

      @johnlocke – YES fool. I have PROOF that what I say is TRUE. Then watch this LIVE video from a convention of GM explaining their joint ventures with COMMUNIST CHINA. GM has 11 joint ventures in China w/SAIC (Shanghi Auto & Industry Corp.) and FAW another Communist government of China run auto company. What this means is: GM, saved by the American Democracy is now owned and run by the communist gov. of China. 70% of produced vehicles were BUILT OUTSIDE the U.S. There are no longer thousands of Americans employed by GM. My friend worked for GM for 16 yrs. and GM sold his division. He now gets $400. a month in pension money because heis outof a job! A far cry from what you think is happening. Wake up fool and watch the truth. This video is actual. It is the prez.CEO – Ackerson – speaking and revealing the facts. Can’t get any more real then this. Maybe you ought to send it to LIB CNN and tell them to report the TRUTH for once in their pathetic lives. http://www.youtube.com/watch_popup?v=Lvl5Gan69Wo

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    • johnlockeComment by johnlocke
      August 3, 2012 @ 10:44 pm

      Yes. GM is a multinational company – based in the US. It sells lots of vehicles in China. Some component parts are made in China. That doesn’t make it a Chinese company.

      Do you really contend that GM doesn’t employ thousands of Americans? That is pretty easy to check.

      Finally, what is with the name calling?

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    • dshevlinComment by dshevlin
      August 4, 2012 @ 9:08 am

      @johnlocke – The problem with people like you is you see the truth and you still spin it to deny it. Your last sentence is typical liberal nonsense and is said only to distract the eye in another direction of which you have failed miserably. I know you see and I think you are not even a real person. Progressives have sent you in here to argue with us and try to get information, I know how you guys operate. Fool is not name calling it is what you are. John Locke – LOL. Good one. Get “LOST” john locke! Ha Ha HA. Yea, I watch tv too. No one agrees with you. I have all the stars,you have one and you probably put that one there! LOL. Trying to explain to you that your tax dollars are being given to communism is beyond hope. Your are the communist. See ya at the finish line buddy. I will be there first and maybe I will give you some water when and if you arrive.

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  2. effwingerComment by effwinger
    August 2, 2012 @ 5:44 pm

    I thought Obama saved Gubberment motors? I heard him say it just days ago. This is possibly just another cooked books action to get more money, or to make an excuse not to pay any back. There is however progress in blaming Europe, and not Bush.

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    • dshevlinComment by dshevlin
      August 2, 2012 @ 7:45 pm

      Obummer bailed them out with our money then GM short saled the co. to CHINA. That is how they paid back their loan to obummer. Only they did not pay it all back. It was “satisfied for a lesser amount”. AND obummer did not repay the debt when he got our short sale money back. Ever notice that? They bail out banks, car co.’s whatever and when they do get paid back no one services the loan to pay back the debt that has the taxpayers liable. The debt never never gets paid back. NONE of it.

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    • dshevlinComment by dshevlin
      August 3, 2012 @ 10:25 am

      @effwinger – johnlocke seems to think he is correct. What he is is a fool. I would like the truth to be known. What I posted is the truth. Go here and spread it far & wide my friend! http://www.youtube.com/watch_popup?v=Lvl5Gan69Wo Thanks! :) Then when you are done with that one go look at another fact of where most of OUR stimulus $ went to create jobs directed by our commander ‘n theif. http://www.abcnews.go.com/WNT/video/us-bridges-roads-built-chinese-firms-14594513?tab=9482930?ion=1206853&playlist=14594944

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  3. middlegroundComment by middleground
    August 2, 2012 @ 6:39 pm

    I have to love the logic of the MSM and the leadership of the Democratic Party. They use the EPA to destroy the domestic coal industry, are trying to cripple domestic oil and natural gas production through new regulations and some D leaders even want to tear down hydroelectric dams so the salmon will find it easier to swim upstream through that gauntlet of government protected birds, marine animals and privileged fishermen. They also are reducing funding for fusion power. But In spite of this total effort to return the US to the energy situation of a Third World country, the president in spot commercials in the NBC Olympic coverage claims he is working hard to develop the nation’s energy independence. He also claimed last month that we have only 3% of the World’s oil reserves and use 25%, a claim which ignores drilling and production improvements during the last half century that have opened the potential of trillions of barrels of oil and tcf of natural gas. Some of his more enthusiastic supporters also claim he hasn’t increased the nation debt 40% in 4 years and that during his tenure in office he has actually reduced spending.

    Obviously, he made similarly outrageous claims during the 2008 election and no one in the MSM seemed willing to point out that what he was saying was untrue, so I suppose this encouraged him to this almost pathetic pattern of saying what is untrue during this campaign. But surely we have people who can see through this fog to the truth or at least I hope so?

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    • dshevlinComment by dshevlin
      August 2, 2012 @ 8:10 pm

      @middleground – Right on! I think the D’s are mentally ill. What is their explanation of where the near 6 trillion increase in debt came from if obummer did not do it? Reduced spending??? It is insulting. I am so sick of the lies and the bs it is like living in a mentally ill world. They look at a blue sky and say no, that is not blue it is green. And they believe their dementia. In November you will see how many see through the fog! Yesterday when Chic-Fil-A’s all over the country had lines a mile long waiting to buy their sandwiches in support of the conservative message, the NY Times reported that obummer was up in the polls in FL and 2 other states. LOLOLOLOL. They are so in denial from their lies. FL is RED. I live there. The truth is their enemy and it will destroy them. Keep the info. flowing it is working!

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    • dshevlinComment by dshevlin
      August 3, 2012 @ 10:26 am

      @middleground – Come back and click on the links I left for others. Then copy & paste and send to as many as you are able to! Thanks :)

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  4. capricorn1Comment by capricorn1
    August 3, 2012 @ 8:10 am

    i have bought my last chevy in 09 and for that matter i will not buy a ford or dodge.union workers are no different than any other to me yet they seem ENTITILED TO BIG PAY AND RETIREMENT BENEFITS.thus making cars and trucks that cost more than a small house did in the seventies.35,000 to 48,000
    for a new pick up truck these people have lost there minds.

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    • dshevlinComment by dshevlin
      August 3, 2012 @ 8:34 am

      @capricorn1 – Good points and you do not exaggerate! The price for a truck today is literally equivalent to some homes for sale here in FL. No kidding. This is why us Realtors are losing our businesses. I have had hundreds of short sales/REO’s that sold for 30K – 60K. Down from 250k – 325K in the boom days. Now that is insane and yes, I think these Libs have lost their minds. The unions are the reason for the high price tags on cars & trucks due to what you said regarding their BIG pay and BIG benefits, lack of competition and lack of accountability is what keeps them employed. Just for arguments sake, PUBLIC unions should be illegal. Those I will not support hence no support for GM/Chevy and all the rest that were bailed out and now work in China. PRIVATE unions don’t bother me. The free market takes care of them but the free market can not take care of PUBLIC unions like Government Motors. Main point to be made is: I don’t care what you or Ford does with your own money, I DO care what the government does with MY money though. Thanks :)

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    • dshevlinComment by dshevlin
      August 3, 2012 @ 10:30 am

      @capricorn1 – Check out the truth and spread it! http://www.youtube.com/watch_popup?v=Lvl5Gan69Wo / http://www.abcnews.go.com/WNT/video/us-bridges-roads-built-chinese-firms-14594513?tab=9482930?ion=1206853&playlist=14594944

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  5. noveldogComment by noveldog
    August 3, 2012 @ 8:47 am

    GM’s financial woes is something Obama and company does not want to talk about. GM is supposed to be his one and only bright and shining star (investment wise). Everything else has been a dismal failure. Now even GM looks like it could end up being yet another fiasco.

    The best thing for Obama to do is to make an early concession speech to Mitt Romney and wish him well. Of course he will never do this. He may even start a war in order to stay in power. He likes taxing and spending, and his wife loves to travel. They want four more years while we poor tax paying slaves are in tears. Where are the jobs? Where is the prospirity? Where is the hope? It is gone just like all that stimulus money and bailout money. All we got is a lot more debt, and the promise of higher taxes, and that ain’t good!

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    • dshevlinComment by dshevlin
      August 3, 2012 @ 10:33 am

      @noveldog – Come back in and click on the links I left for capricorn1 and others. That is your proof. Then spread it far & wide. Sick of these idiots claiming otherwise. The lies and bs must end now!The left is mentally ill.

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  6. mrwilsonComment by mrwilson
    August 3, 2012 @ 11:08 am

    The lead in really does say; “Blamed On Europe.” Once upon a time there was an American word: “Accountability.” Today, if these executives had four arms with four hands they would be pointing in all directions away from themselves. Didn’t GM receive a big chuck of our,(We The People)money? Are they blind and ignorant and as so many others didn’t see this coming and plan for it? On second thought, perhaps they did and the plan is for more of our money. Payback time will mean a new Chevy in every driveway. I do not believe that American parents are raising their children to blame all others for their mistakes and errors. However, on that, I fear I may be very wrong and that would be my fault to have assumed such a dynamic within our culture today. I will soon be 100 years old and never have I worried so for my country and for the children of our great nation. Rather than sending millions and billions hither and yon, send a few bucks to Focus Adolescent Services, Focusas.com. They save American children without a single dollar from the government. I have followed their good work as have millions of other citizens. Send them the price of a cup of coffee and we can help to save the next generation.

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    • dshevlinComment by dshevlin
      August 3, 2012 @ 3:39 pm

      @mrwilson – Bravo! The lead in says this because most of government motors sales are in Europe/Asia. I hope you saw the links I left above, if not please come back and view them. The information is bona fide and needs to be on more pc screens urgently! Accountability is the key issue today, you nailed that one. It is unfortunate but the left does not even know how to spell that word. Big part of our conservative fight as you see. Payback time is coming in November and it is going to be a big one. We must then get back our Chevrolet before we can put one in every driveway. Until it is American again, do not support it. Thanks for your comment. :)

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  7. calradoComment by calrado
    August 3, 2012 @ 11:24 am

    I used to buy Chevys & Oldsmobiles (remember those?) until I realized they were really made in Canada & Mexico. GM’s trouble started decades ago when the UAW started dictating to management. The final straw was when Obummer had the gov’t. buy them out. I’m a Ford man now…

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