GM Reports Profit After Bankruptcy
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Filed under: Chapter 11
Just two short years after filing for bankruptcy, GM is reporting an annual profit for 2011. This is great news for the many employees and stockholders who rode out the storm when the company entered Chapter 11 in 2009.
Post-Bankruptcy Bounce Back
Gm reported an annual profit of $7.6 billion in 2011, up from only $4.6 billion in 2010, but and a far cry from its record profit year in 1995. As a result, shareholders saw a leap in stock prices as global sales volume rose by 7.5% last year.
How did they do it? GM made big changes to their operations in 2009 as part of their debt restructuring process. Several plants were closed, many lost their jobs and many weaker performing dealerships were shed. The company moved from a long standing pension plan to an employer contributor 401(k) plan, a move many were not initially pleased with. However, these changes have allowed GM to repay the government bailout loans and regain its stake in the market, not a bad improvement in such a short time.
