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Record Profits, but Still Mixed Success at GM

Record Profits, but Still Mixed Success at GM
Photograph by Bill Pugliano/Getty Images

The term “record earnings” tends to enhance the mood of all who hear it. On one level, General Motors’ record annual profit is clearly good news. America’s largest automaker earned $7.6 billion on $150.3 billion in sales in 2011, just two years after taxpayers bailed it out. Moreover, its once-weak compatriots in the U.S. auto sector—Ford Motor and Chrysler Group—reported profits for the year, as well. That’s the first time the Big Three, as old-timers fondly call them, have all been profitable since 2004.

But those profits have come at a cost. After years of watching companies build up cash even as the overall economy was in decline, Americans know all too well that the bottom line is only part of the picture. Not only has GM won back its financial health by closing plants and reducing wages, it’s not yet thriving in some areas that matter.