At General Motors, Loss Reduction Is a Good Start

Today General Motors CEO Fredrick A Fritz is scheduled to give the companies first update since it emerged from bankruptcy in June. Sources close to GM say that they will show much improvement in the third quarter earnings and cash flow. General Motors will show improvements in cash flow because of lower costs and better net pricing on its cars. “GM is stabilizing, but it’s not stabilized”, says longtime industry watcher Joseph Phillippi who is the principal of Auto Trends. Also the company’s earnings and cash flow will be helped in the quarter by the fact that it shut down many plants in June when it was in bankruptcy. On July 10, the new GM emerged and the old GM that consisted of unwanted plants and other assets was split from the company. Vice-Chairman Robert Lutz told reporters in October that GM's cars had an $8,000 increase in net pricing in September. General Motor sales have risen in September and GM's market-share losses have leveled off in recent months to about 20%. To me it seems that General Motors is not giving up and is continuing to make strides to get out of bankruptcy.