In less than a year, General Motors Co. has roared back from bankruptcy to a quarterly profit. Now comes the hard part: Sustaining the income and repaying billions of dollars in government aid.
There are signs that GM is on track to do just that. Revenue is up 40 percent over the first quarter of last year. U.S. sales rose 17 percent for the quarter, and the automaker made an operating profit in North America, which had been a cash incinerator. Units in Asia and Latin America posted strong numbers, too.
As a result, the automaker announced Monday, its net income rose to $865 million, a dramatic reversal from the $6 billion the company lost in the same period last year.
"Today's news was wonderful, and even better than we ever expected to be this far in the post-restructuring period," said Steven Rattner, former head of the Obama administration's Auto Task Force.
And we should believe all this because..? GM had no problems last month trotting out their CEO and flat-out lying to the American public regarding the true nature of Government Motor's claim they had repaid, in full, their share of the TARP bailout loan (they simply used another line of TARP credit to do so).
We note that an earlier version of this story from yesterday morning failed to point this out so we give credit to this version for broaching it... sort of.
Some experts were skeptical. James Schrager, professor at the University of Chicago Graduate School of Business, said GM has a history of making boastful claims, only to disappoint. A recent television ad in which CEO Ed Whitacre declared that the company had repaid its government loans in full, with interest, was misleading, he said.
It was not misleading in any way. It was a flat-out lie.
To a larger point, though, when the government owns 61% of GM stock and was caught red-handed cooking the books, what exactly does turning a profit of $865 million mean? And probably more germane to this exercise, when that same government that owns GM can print money to its heart's content, of what real significance and meaning are balance sheet losses?
P.S. Stever Rattner, who wrote one of the most self-serving articles we've ever read, will be penning a book on how Team Obama rescued General Motors. To say his book will lack credibility is to understate things a tad.