2010 Chevrolet Equinox
General Motors has not turned a profit since it made $891-million (U.S.) in the second quarter of 2007. Since then, it entered and re-emerged from bankruptcy protection, shuttered dozens of factories and laid-off thousands of workers. Below are five reasons the company was able to return to profitability:
1. The chapter 11 bankruptcy process wiped out tens of billions of dollars in debt and interest costs. Interest expense fell to $337-million (U.S.) in the first quarter from $1.2-billion a year earlier.
2. The auto maker eliminated four divisions, Pontiac, Saturn, Saab and Hummer, cutting costs and enabling it to trim the size of its dealer network.
3. GM slashed the size of its white-collar work force in North America and reached new deals with the Canadian Auto Workers and United Auto Workers unions that trimmed its outlays for pensions, health care and other benefits.
4. New products such as the Chevrolet Equinox and GMC Terrain made in Ingersoll, Ont., have taken off and are generating thousands of dollars more in revenue than the vehicles they replaced.
5. The vehicle market in the United States has bounced back from the dismal levels of late 2008 and early 2009 that sent GM and Chrysler LLC into chapter 11 bankruptcy protection.