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GM earns $2 billion in revenue

Marketplace Staff Nov 10, 2010
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GM earns $2 billion in revenue

Marketplace Staff Nov 10, 2010
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TEXT OF STORY

STEVE CHIOTAKIS: We also got word today from GM that the automaker earned almost $2 billion in revenue in the past three months. That compares to the more than a billion dollars it lost in the same time period last year. The results should help GM as it takes a shot at becoming a public company again. It’s expected to issue its initial public offering next week.

Marketplace’s Alisa Roth covers the automotive sector for us. She’s with us live in New York to talk about it. Good morning Alisa.

ALISA ROTH: Good morning.

CHIOTAKIS How did GM make this much money?

ROTH: It is pretty impressive. Especially because — as you were saying — they were doing so badly not that long ago. There are a couple of things here. First, the bankruptcy in 2009 was essentially a do-over. Among other things, it let GM erase its debt. Also the company’s been working for years to minimize health costs. And the CEO said, more recently, GM has been cutting costs, it’s improved its balance sheet and its generating cash. That said, even the CEO acknowledged that GM still has work to do. It’s still losing money in Europe. And it needs to do a better job marketing vehicles in North America.

CHIOTAKIS Now we’ve talked about GM going public soon, will these results help in that category?

ROTH: Definitely. GM has been thinking about the IPO pretty much since it came out of bankruptcy, a year ago. Michael Robinet is an analyst at IHS Automotive, which is a consulting firm.

MICHAEL ROBINET: Certainly GM has been very focused for the last number of quarters to really get themselves ready for the IPO, to get their finances in shape and certainly show that they can be a very profitable company going forward.

That’s how GM is going to market itself. But the big question is still whether it can sell enough shares at a high enough price for taxpayers to get their money back.

CHIOTAKIS Marketplace’s Alisa Roth in New York. Alisa thanks!

ROTH: You’re welcome.

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