General Motors Company
Hopes is the only thing left with US carmaker General Motors (GM) to return profitability in 2011 after emerging from bankruptcy protection. The company’s financial adviser Evercore Partners estimates that GM will lose $17.5bn (£10.9bn) this year before making a profit of $3bn in 2011, news said. This estimate is based on GM selling 16 million vehicles a year, up from current levels of less than 10 million. A slump in sales forced GM to file for bankruptcy protection this week.
They also announced this week that it had agreed to sell its Hummer brand of sports utility vehicles by the end of September. However, reports suggest that a deal with China’s Sichuan Tengzhong Heavy Industrial Machinery may be blocked by Chinese regulators. But, analysts say that the gas-guzzling image of Hummer does not sit well with China’s attempts to develop an auto industry focused on smaller, fuel-efficient cars.
US government backed GM’s to move into bankruptcy protection, which is expected to take a 60% stake in the carmaker. In fact, the White House is also putting another $30bn into GM on top of the $20bn it has already given the carmaker. It is expected that GM may be able to exit bankruptcy protection within the next 60-90 days. GM, along with carmakers across the world, has suffered from a massive drop in sales during the economic downturn.
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