*from www.bloomberg.com, May 6, 2013 (To view original article click here.)
Take Away #1: General Motors Co. (GM) is planning to invest about $16 billion on U.S. factories and facilities through 2016.
Key Facts and Figures:
- GM has now been profitable for 13 consecutive quarters.
- Its planned $16 billion in investments in the U.S. is more than it will spend in China, the company said.
- “The $11 billion in capital that will be spent in China by 2016 is coming out of our joint ventures rather than Detroit,” said GM’s Selim Bingol, VP of public policy, in a letter published in the Wall Street Journal.
- “The capital spent in China by 2016 is far less than the approximately $16 billion in capital GM will invest in the U.S. over that time,” Bingol said.
Take Away #2: GM disclosed the U.S. investment figure after announcing the $11 billion investment for its joint ventures in China last month in Shanghai.
Key Facts and Figures:
- That was an increase form a 2011 outline to spend $7 billion through 2015.
- GM through its joint ventures sold 2.84 million vehicles in China, its biggest market, last year and wants to boost that to 5 million by 2015.
- The Wall Street Journal last week ran a commentary on its op-ed page titled, “Welcome to General Tso’s Motors.”
- The op-ed commentary said that China “is disproportionately benefitting from the 2009 U.S.-backed bankruptcy reorganization of Detroit-based GM.
- The journal’s editorial page previously has criticized the bailout.
- GM “was in China long before the economic meltdown of 2008-2009, and not one dollar of U.S. taxpayer rescue money was spent on out operations there,” Bingo said in the letter.
- “Our Chinese joint ventures are self-funding, meaning we require funds spent there to be generated there,” Bingol said.
Take Away #3: The U.S. spending plan ties in with CEO Dan Akerson’s strategy to boost operating margins to 10% in North America by mid-decade from 7.4% the past three years.
Key Facts and Figures:
- GM is introducing about 20 new or refreshed vehicles in the U.S., part of a plan to increase profits and rebound from last year’s 88-year-low in U.S. market share.
- “Our investments in the U.S. and China reflect our determination to remain No. 1 in the world’s top two markets,” Greg Martin, a GM spokesperson, said.
- GM has said it invested $8.5 billion in the U.S. since emerging from bankruptcy, including efforts to prepare for production for more fuel-efficient engines and vehicles.
- GM has 31 facilities in the U.S., Martin said.
- That includes 12 assembly plants, according to GM’s website.
- With its China investment, GM is increasing its number of assembly plants to 17 assembly plants, Bob Socia, GM’s China president, said last month.
- The total number of facilities in China will be 30 in 2016, GM said.
Take Away #4: The company on May 2 reported that first-quarter net income fell 11% to $1.18 billion from a year earlier.
Key Facts and Figures:
- Profit excluding one-time items was 67 cents a share, surpassing the 54-cent average of 16 estimates compiled by Bloomberg.
- Profit in North America before interest and taxes slipped to $1.41 billion during the quarter from $1.64 billion a year earlier.
- Profit in international operations, which include China, slipped to $495 million from $521 million a year earlier.
- “If you look at profits, obviously, the U.S. market” remains “a major profit center,” said Alan Baum, analyst at Baum & Associates.
- GM fell 0.7% to $31.87 at 9:31 a.m. New York time.
- The automaker’s shares gained 11% this year through May 3 compared with a 13% increase for the S&P 500 Index.
- GM’s May 3 closing price of $32.10 was the highest in almost two years and compares with the stocks $33 initial public offering in November 2010.
*To view original article from www.bloomberg.com click here.