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]

If you liked the article, share on:

Topics: gm, ipo, united states

Comments

Recommended

We’re willing to bet that the Bentley Bentayga is not the first thing that comes to mind for most people who are into off-roading and outdoor activities. It just doesn’t...
by - November 23, 2017
The other day, it was confirmed that Volvo will finally bring the XC40 to US soil, where it will first make an appearance at the 2017 Los Angeles Auto Show....
by - November 23, 2017
There is no question that the new BMW M5 (F90) high performance sports sedan is more powerful, faster and more enticing than the previous model. But for interested customers in...
by - November 23, 2017
Following the Tesla Roadster’s electrifying revelation on Thursday, Musk’s highly ambitious goals have skyrocketed when he tweeted about his future plans for the new sports car. Well, kind of. The...
by - November 23, 2017
Earlier in November at the 2017 SEMA Show in Vegas is when Hennessey unwrapped the Venom F5 to all of us. But it was actually first introduced as a concept...
by - November 22, 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