General Motors reports drop in earnings

Published:  3 Aug at 9 AM

US car manufacturer General Motors has reported a drop in profits for the last quarter as the debt crisis in the eurozone means that sales in Europe have been sluggish. Net revenue for the three month ending in June was $37.6 billion compared to the $39.4 billion reported for the same period a year ago.

Profits for the quarter were down from $2.5 billion last year to $1.5 billion. According to GM the decrease was almost entirely to do with the fact that the dollar has become stronger against most of the other major world currencies.

In Europe, where GM makes Opel and Vauxhall cars, the quarter resulted in a pre-tax loss of $400 million compared to pre-tax profits of $100 million for the same period in 2011.

GM’s best performance was in North America where the car company was able to declare pre-tax profits of $2 billion which was down from the $2.2 billion it made in pre-tax profits a year earlier.

Dan Akerson, GM’s chief executive and chairman, said the results had been solid in the US but that there was still some work to be done to offset the headwinds in South America and Europe. The carmaker was forced to file for bankruptcy in 2009 and received a bailout worth $50 billion from the Obama administration.