U.S.-based General Motors, the world’s largest automaker, recorded its biggest profit ever in 2011, two years after emerging from bankruptcy with the help of a government bailout.
The century-old carmaker says strong sales in the United States and China helped push its profits to $7.6 billion, easily topping the company’s previous $6.7 billion earnings peak in 1997. But GM said its sales slowed in the October-to-December period last year and its $500 million in profits for the quarter were the same as in 2010.
The company has continued to lose money on its operations in Europe, where the economy has slowed under the weight of the continent’s debt crisis.
GM regained the top global sales mark last year over Japan’s Toyota, whose manufacturing was disrupted by the Japanese earthquake and tsunami and flooding in Thailand.
GM’s record profits marked a significant turnaround from its near collapse in 2008, when it was forced to secure a U.S. government bailout, and many American consumers sarcastically called the automaker “Government Motors.” The company later filed for bankruptcy, but now has repaid about half of its $52-billion rescue package. The government still owns about a quarter of the company.
The bailout was controversial at the time and now has emerged as a factor in the U.S. presidential campaign. U.S. President Barack Obama, a Democrat, has defended the government’s role in the rescue of GM and another automaker, Chrysler. The rescue package was begun by his Republican predecessor, President George W. Bush. Mr. Obama says the bailouts saved the U.S. auto industry.
But Mitt Romney, one of the leading Republican contenders seeking to oust Mr. Obama in next November’s election, said at the time the government should have not have extended the assistance and let the companies fail, calling instead for a restructuring of their finances. Romney says Mr. Obama’s aid “amounted to crony capitalism on a grand scale” to help labor unions.
Surveys in Michigan – at the heart of the U.S. auto industry – show that voters think the bailout was successful and saved thousands of jobs. But Romney, who grew up in Michigan where his father George was an auto executive and former governor, said in a newspaper column Thursday that without the government’s intervention, “things there would be better.”
In the lengthy campaign to pick a Republican party nominee to face Mr. Obama, Romney faces a tough primary election February 28 in Michigan against, Rick Santorum, a former Pennsylvania senator. Surveys show that among Republican voters, Santorum has pulled even or surpassed Romney in both Michigan and nationally . Both trail Mr. Obama in hypothetical November matchups.