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GM expects to show annual profits in 2011

Posted Friday, Jun 5, 2009, 11:40 am in Employee News

General Motors Corp. expects to return to annual profits in 2011 and estimates stock in the new company it will launch from bankruptcy will be worth as much as $48 billion, according to estimates filed Thursday in its bankruptcy case, the Detroit Free Press reported.

The figures, the first provided by the company, show the tough haul ahead for the U.S. government to make money on its investment in rescuing the nation’s largest automaker, despite a bankruptcy restructuring that will slash its debt and overhead, the paper said. The company’s financial adviser, Evercore Partners, offered projections for GM’s finances in its bankruptcy case based on several scenarios, the Free Press said. It forecasts that GM will lose $17.5 billion this year before reaching a profit of $3 billion in 2011 before taxes, rising to $7.8 billion in 2014, the paper said.

The new GM will count on a rebound in U.S. vehicle sales from about 10 million this year to about 16 million by 2012 to pull back into profitability, pumping up its output from 3.8 million vehicles worldwide this year to 6 million by 2014, the story said. The estimates are slightly more pessimistic than what GM used in its Feb. 17 plan, but match those of some analysts, the paper said. (Detroit Free Press)
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