GM’s IPO earnings before interest and taxes may rise to as much as $19 billion

Article by Christian A., on November 6, 2010

In the pitch that General Motors Co. is giving investors about its initial public offering, it is claiming that its earnings before interest and taxes could rise up to $19 billion in what is dubbed as a “high cycle” for the global automobile industry.

Chief Financial Officer Chris Liddell said that GM has cut its hourly labor costs and will be able to generate up to $16 billion in free cash flow with profit margins as wide as 10%.

GM aims to raise as much as $10.6 billion in an IPO. The restructuring done on the old GM had allowed the carmaker to earn up to $4.2 billion through three quarters this year.

Liddell said that GM seeks to pay off all debts and fully fund employee pensions. In a videotaped presentation on retailroadshow.com, Liddell said, “This will give us the type of fortress balance sheet that we believe is appropriate for a company in a high fixed-cost, cyclical industry.”

GM estimates that by next year, it would already have cut hourly labor costs by more than two-thirds, from $16 billion in 2005 to $5 billion. Liddell noted that health care-related costs for hourly retirees amounted to $4 billion in 2005.

Mary Ann Keller, the consultant and founder of the self-titled firm in Stamford, Conn., said that GM will have to keep its current cost base and observe an economic recovery to realize those profit projections. [via autonews - sub. required]

Topics: gm, ipo, united states

If you liked the article, share on:

Comments

Recommended

Without a doubt, the SUV segment is getting increasingly more saturated. This month alone, we were greeted with city-oriented SUVs from the Kia Stonic to the Hyundai Kona, and now...
by - June 27, 2017
The Swedish moose test is known to have victimized many in the past, including the Toyota Hilux that massively failed. So knowing that many cars from trusted and leading automakers...
by - June 27, 2017
All-new BMW X3 (G01) just made its debut! The updated model has a familiar design, and slightly increased dimensions compared to its successful predecessors. For more cabin space, the wheelbase...
by - June 27, 2017
Polestar is notably known to be Volvo's internal performance specialists, and around last year Polestar revealed to the public that it will utilize electrification to further advance the power of...
by - June 26, 2017
Earlier this month, Porsche introduced to us the 911 Turbo S Exclusive Series. The car wore a Golden Yellow Metallic paint. The same time it was launched, the company said...
by - June 26, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries