GM TURNS A PROFIT, A VERY GOOD PROFIT
What a difference a year makes. This first quarter of 2010, American operations contributed a net $1.3 billion. The rest of the world cost GM $500 million. We know Europe has been a drain on GM for decades and quite frankly GM should have had the guts last year to tell Sweden, Germany and England that if Saab, Opel and Vauxhall were so important to them, then as the good smoked salmon socialist countries they are, nationalize them. Chris Liddell, CFO of GM and a fellow old boy of my school, Mt Albert Grammar in Auckland N.Z., also should have had the guts to tell us the real truth about their Chinese operations, instead of briefly mentioning sales were slowing. China is in fact a huge financial drain upon the company, not Europe or Australia, and always will be. The joint ventures foreign corporations have to invest in are completely one sided. Heads the Communists win and tails they lose. SAIC, GM’s partner, now possesses all of GM’s technology and as the dominant partner, they cook the books so GM never makes a dime. Chris, you were known as a top Rugby player who could foot it against the best. Don’t hide behind political correctness, tackle China head on and with a “king hit” tell them as it should be and that is you’re packing up your toys and going home.
GM is currently making cars America wants and it is selling them at full price, none of this Toyota discount nonsense. The cars are outwardly good looking but most of all they are beautifully designed from the floor up and most importantly, they are well engineered. A Cadillac CTS-V (my next car when this recession ends) is thirty grand cheaper than its Mercedes or BMW equivalent and is twice the car. The Chevy Volt (I am praying the battery is American made!) is the most awaited model GM can claim it has had in decades. Car dealers already tell of long waiting lists and they expect the car to resell for far above MSRP until GM’s production can catch up with the public’s demand. Compare the beauty of the Volt to the stark ugliness of Toyota’s Prius. It is night and day. As much as I hate to concede the Japanese have been the trendsetter for small cars over the last twenty years, but they have awoken the sleeping giants. Within two years Ford and GM will leave their Japanese competitors in the dust and they will regain their positions of number one and number two respectively in the world.
Chris Liddell says GM’s public offering could be just months away. I have already got my order in with my stockbroker. My 401K portfolio will be dominated by GM. My only disappointment is they shed the Pontiac brand. Maybe it will be resurrected as GM has to extend its range of models to keep production matching demand! Sure, this might be wishful thinking. After driving Pontiacs for years I will have to get used to telling people, I drive a Caddy, the best car money can buy. If I hold onto my Pontiacs I could have valuable collectors’ items in ten years time!
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