Transcripts

GM Shifts Closer To The Road To Recovery

PAUL KANGAS: General Motors' turnaround could be gaining some traction. The auto maker today reported a $115 million loss in the third quarter, much narrower than the $1.7 billion loss during the same period last year. But if you take out restructuring costs, GM made money. Diane Eastabrook reports.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: General Motors says overall improvement in its global operations helped it trim losses in the third quarter versus the same period last year. And there was other good news from the world's largest auto company. If costs from GM's North American restructuring are excluded, the company actually made a profit of $0.93 in the quarter. That is almost double what Wall Street expected and far better than its nearly $2 loss during the same quarter last year. Still, the company's chief financial officer wasn't satisfied with the results.

FREDERICK HENDERSON, VICE CHAIRMAN & CFO, GM: I think an important guidepost, if you will, an important step in the turnaround. But we are by no means where we want to be.

EASTABROOK: GM still faces several hurdles to solid profitability. They include negotiating reduced wages and benefits with former parts unit Delphi, which is currently in bankruptcy. Reducing the amount of cash GM is burning while it restructures and shoring up sales in an increasingly competitive market. GM has seen its global market share slide, but Henderson says the company is optimistic that new products headed to U.S. showrooms over the next few months will help reverse that trend.

HENDERSON: We are entering the sweet spot of our product portfolio. We have an all new family of full-size pickups which is the largest product, the largest single product we have within our company and it's still the largest segment of the U.S. market -- very, very excellent product.

EASTABROOK: Although investors punished GM's stock today for a less- than-stellar third quarter, the stock has been improving in recent months. Some analysts say they are satisfied with the progress the company is making and think GM's fortunes will eventually reverse.

GEORGE MAGLIANO, DIRECTOR OF AUTO RESEARCH, GLOBAL INSIGHT: I think from operations they're making more money per vehicle. Their value pricing scheme seems to be working, in fact a lot better than other people thought and so I think they are in a good position now and it was good to see the news this morning.

EASTABROOK: GM says it is now meeting its cost cutting goals. Meeting sales goals will be key to staying in the black. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Chicago.