Their reasoning is that much of the previous losses are due to special one-off transactions, and that the company is now undergoing a massive restructuring program.
While not going so far as to make a firm prediction on a return to profitability, Lutz said that if all goes to plan GM could start making money again in 2010. "At this point the future is so cloudy in terms of the development of the market, when it's going to pick up again," he explained to reporters from the Associated Press.
In the past 12 months, GM has closed a handful of factories, laid off thousands of workers, overhauled much of its product lineup, and started development of a new generation of global vehicles and efficient powertains. The first of these have already been seen with the reveal of the new Chevrolet Cruze and Family Zero engine range.
If GM can continue to trim its structural costs, and if sales volumes pick up, Lutz said, the company's fortunes could change and its model lines, including small cars, could start making money very quickly.
Standing in GM’s way is pressure on fuel prices and the stagnant U.S. economy. Lutz said that GM is still losing money on most of its model lines, and earning profits on small vehicles – one of the fastest growing segments – will still be very hard to achieve. Understandably, analysts are less confident and are predicting that the Detroit 3 as a whole will continue to lose at least $5.6 billion annually for several more years.
The loss is based on a comparison with 2004, when pickups and SUVs made up almost 60% of U.S. vehicle sales. So far this year, the figure is however just under 50%, but analysts are predicting it to drop further by the end of the year, making it even harder for companies like GM to recover.
Reader Comments
Fri Aug 29 2008 2:47 PM
steve burns says
To return to profitability, GM needs to first get rid of Lutz.
Now that GM is retooling for small cars, it is years behind the foreign competition.
GM has seen nothing yet. The new hybrids and electrics coming from Japan and Europe are going to seriously hurt GM...not to mention if chinese cars start coming. People are not going to rush to a $40,000. volt. They will to a $20,000 electric Honda .
Fri Aug 29 2008 5:05 PM
NoNameDenton says
Lutz has been a pain, especially when he said no diesel cars for America.
Sat Aug 30 2008 12:33 AM
InkMaster says
Sigh... Lutz is nuttier then squirrel poo :p
Sat Aug 30 2008 7:40 PM
Tokugawa says
Ah, You are all wrong. Lutz is the inspiration behind the company.
Sun Aug 31 2008 6:31 AM
dcsrs says
I don't always agree with him but he has been a strong front to GM. I hope GM is grooming his replacement to be equally strong and show the same kind of leadership to the design department.
Sun Aug 31 2008 11:46 PM
NoNameDenton says
How are we wrong by stating our opinions?
Sun Sep 7 2008 9:12 PM
Don says
And pigs could fly. Don't believe a word out of Putz's mouth. He's a circus huckster.
Mon Sep 8 2008 4:45 PM
saabfan says
How did GM got this point again Bob? yum.....crunch....Are U eating Twix?
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