Big Challenges for General Motorshttp://www.fool.com/investing/general/2012/02/16/big-challenges-for-general-motors.aspx John Rosevear
February 16, 2012
Good news or bad news? For General Motors (NYSE: GM ) , the fourth quarter brought a bit of both.
While the auto giant said on Thursday that its net income for the quarter was just $725 million, the lowest in two years, that was still enough to make 2011 the single most profitable year in GM's 103-year history.
In a way, that frames GM's situation nicely: Some things are working really well, and some things still need work. Fortunately, that work appears to be getting done.
Strong profits, big challenges
The good news is indeed good, and we shouldn't lose sight of it: GM's recent new products, particularly the Chevy Cruze compact and its smaller sibling, the Sonic, are competing very well and gaining share in markets all around the world. In just over a year, GM has already sold more than a million Cruzes, CEO Dan Akerson said on Thursday. Meanwhile, the Sonic has "handily" outsold the acclaimed Ford (NYSE: F ) Fiesta in its three months on the market, he said.
That success has been a key part of the strong results seen in the U.S. and Asia, which were helped also by the problems faced by Toyota (NYSE: TM ) and Honda (NYSE: HMC ) in 2011. Elsewhere in the world, however, challenges for GM remain.
The company is in the process of aggressively refreshing its somewhat dated product portfolio in the region -- the Cruze was launched last year to considerable acclaim, and five more new products are due in 2012 -- and "executing stringent cost-control measures," to use Akerson's somewhat grim phrase. Nutshell summary: GM has a plan, the plan is underway, and things should be considerably improved a year from now.
The troubles here are not new, and recent developments have made it clear that Akerson plans to take decisive action -- but while both he and Ammann