CLIO, MIDLAND -- General Motors’ first quarter profits are another sign the Detroit Three automaker remains on the right track nearly two years after emerging from bankruptcy. GM posted a $3.2 billion profit for the first part of 2011, with revenues as high as $36.2 billion.
However, auto analysts have been somewhat critical about the way GM got there, with many pointing to the many incentive packages GM issued to usher buyers into it’s showrooms.
Dr. Tim Nash of Northwood University says that’s one of the issues separating GM from rival Ford Motor Company’s overall market strength, even though Ford’s first quarter earnings were under $3 billion; less than GM’s.
“When you compare them with Ford, Ford has been able to raise their prices and not only meet their revenue expectations but meet their price and profit expectations. GM had to cut pricing and introduce some incentives,” he said.
However, Nash calls the GM posting impressive and credits much of it to the drastic reforms made during bankruptcy. “They came out with a very clean balance sheet. They’ve cut their costs dramatically,” he said.
Meanwhile GM dealers like Jim Simms of Simms Chevrolet in Clio also give credit to the popularity of many new and remodeled small vehicles. “Malibu is really popular right now; the 4C model (which) gets over 36 MPG. Cruze is a very popular model right now. It’s easy to afford,” he said.
GM is the last of the Detroit Three to post its first quarter results. Ford came in at $2.6 billion and Chrysler Group pegged $116 million earnings.
