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GM Earnings Fall By Over Half for Q3

Maker hurt by restructuring costs; buoyed by European improvement.

by on Oct.30, 2013

The surge in truck sales -- the 2014 Chevy Silverado shown here -- helped prop up GM's bottom line.

General Motors reported its net income was cut in half during the third quarter as one-time adjustments for restructuring the company’s debt reduced profits to $700 million from the $1.5 billion reported for the same period a year ago.

Despite the drop income, GM chairman and chief executive officer Dan Akerson said he was satisfied that GM was still making steady progress as its North America Operations, where margins surpassed 9%, continued to show strength. And the maker also saw an improvement in its loss-making European operations as a new turnaround plan appeared to be taking hold.

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During the third quarter, GM said net income to common stockholders was $700 million, or 45 cents per fully diluted share, down from $1.5 billion, or 89 cents per share a year ago.  Investors appeared to be taking the results in stride, however, with GM shares up in early trading. Excluding the one-time items, GM would have earned $1.7 billion, or 96 cents a share. That was ahead of the 94-cent forecast of analysts surveyed by FactSet.

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GM Could Cut More White-Collar Jobs

Maker wants to match margins of rivals like Ford, Hyundai.

by on Dec.29, 2011

GM's goal of boosting margins could mean significant white-collar job cuts.

Like a late-to-the-party Grinch, General Motors could sap some of the holiday cheer from its white-collar workforce.  Frustrated that it isn’t generating the sort of profit margins seen at some of its key competitors, GM is looking at ways to boost its efficiency – which could mean more cuts in its salaried staff.

That’s one of the possibilities under study by the Miami-based management consulting firm Hackett Group, which GM has hired to explore its options, reports the Bloomberg News Service.

For the first three quarters of 2011, GM delivered a 5% operating margin, compared with 6.7% at Ford Motor Co., 7.7% at Volkswagen and 10% for Hyundai.  As part of his Power 88 Plan, announced earlier this year, Nissan CEO Carlos Ghosn declared a goal of boosting the Japanese maker’s margins to 8% — along with an 8% global market share target.

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A GM official would not provide details of GM’s strategy to boost margins, nor even confirm Hackett’s hiring but did acknowledge to Bloomberg’s Dave Welch that under CEO Dan Akerson, “We are streamlining our business, looking for efficiencies,” adding “there will be some headcount reductions” on a global basis.

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