Just two years after receiving a massive United States government bailout and being dragged through a humiliating bankruptcy process, General Motors has announced a full-year record profit as sales growth in the U.S. and China assisted the giant corporation to regain it’s title as the world’s largest automaker relegating Toyota to second spot.
Full-year profit soared by 62 per cent in 2011 to reach $7.1 billion, beating expectations, breaking records for the 103-year-old firm and GM executives said more profits are on the way.
GM brands, Holden, Chevrolet, Cadillac and Isuzu, said it would make bonus-sharing payments of up to $6,500 to its US employees, further evidence of the success of president Barack Obama’s controversial bailout for GM and Chrysler worth roughly $74.4 billion.
GM’s turnaround has thrown a spanner into Republican presidential candidate Mitt Romney’s bid to oust President Obama from the White House, as the Michigan born candidate criticised the government bailouts as “crony capitalism on a grand scale”, arguing the carmakers should have been allowed to go bankrupt. The current profitable result means that the rescue package is actually making the government money.
Meanwhile, GM chairman and chief executive Dan Akerson welcomed the result of GM once again becoming the best-selling global carmaker even though the company’s trouble spots continued to be Latin America and Europe. Not to be deterred, global investors drove GM shares up more than 9 per cent to finish at USD$27.21. Under the bailout deal the U.S. government still owns a 26 per cent share in the company.