GM Earns $1.7 Billion In Third Quarter

DETROIT (WWJ) - General Motors earned $1.7 billion in the third quarter, slightly better than analysts expected.

"GM delivered a solid quarter thanks to our leadership positions in North America and China, where we have grown both sales and market share this year," said GM CEO Dan Akerson, in a statement. "But solid isn't good enough, even in a tough global economy."

General Motors made $2.2 billion before taxes on its North American operations. But, the company lost money in Europe.

GM Chief Financial Officer Dan Amman says the company needs to improve its profit margins. That means looking for was to leverage General Motors large scale, and cutting out waste.

"What we're not talking about is a cost cutting exercise in the old fashioned sense of the word," Ammann said in an interview with WWJ AutoBeat Reporter Jeff Gilbert. "What we are talking about is getting a culture of continuous improvement instilled in the company, and making sure we are as efficient as we can be."

Ammann promised that any cuts would be made in an intelligent way, that GM would not scrimp on the product development process.

"This is about making sure we can do more good products, not less," he said. "If we get efficient in the back office and overhead, and other areas of the operations, and engineering, we'll be able to get more out of product development, more great vehicles in the future."

The third quarter is not as good as last year, even though revenues rose to $36.7 billion dollars. But GM also paid more in costs for raw materials, and to launch new products.

GM sales improved during the quarter.

"General Motors benefited from Japanese automaker struggles in the third quarter and they were able to boost market share while cutting back on incentive spending," said Edmunds.com senior analyst Jessica Caldwell, in a statement. "The addition of compelling products like the Chevy Cruze also contributed to their success. But with their Japanese competitors re-emerging, GM will have a tougher fight on their hands in the coming months against refreshed and redesigned offerings like the Toyota Camry and Honda Civic."

Ammann warned that General Motors fourth quarter will be the weakest of the year. He said it will be similar to the fourth quarter of 2010, when GM made just over $500 million. Ammann would not project into 2012.

Next week will mark the first anniversary of GM's Initial Public offering of stock. While the stock price has been running about $10 a share below the $33 IPO price, Ammann says GM has met all of its goals in that first year.

"We've made good progress," he said. "We've just posted our 7th consecutive profitable quarter, continue to generate cash flow. We feel very good about where we are. But, havign said that, as we look forward, we still see very significant work to do and significant opportunity to get the company as profitable as it can be, so we can reinvest in the future."

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