Profitable GM possible this year, new CFO says

THE ASSOCIATED PRESS

DETROIT–If the economy co-operates and auto sales recover a bit, General Motors Co. has a reasonable chance of turning a full-year profit in 2010, its new chief financial officer said Wednesday.

Former Microsoft Corp. CFO Chris Liddell, at his first meeting with reporters in Detroit, said the automaker is making money in Brazil and China and the middle of North America but struggling in Europe.

"Relative to where we were a couple of years ago, that's enormous progress," he said at GM's downtown Detroit headquarters.

A full-year profit for GM, which left bankruptcy protection in July, would be the company's first since 2004 when it made $2.7 billion (U.S.). It has posted more than $88 billion in losses since then.

Liddell also said it's possible GM will sell shares to the public in the second half of 2010.

But he wouldn't set a timetable because GM must be making money, auto sales and the economy have to recover and the financial markets must be receptive. "It's impossible to sit here in March and say when all those factors are going to come together."

GM has gotten $52 billion in American federal government aid. Liddell said he would like to repay the $6.7 billion loan portion of the aid before June.

GM's largest shareholder is the U.S. government, with 61 per cent.

Other stakes are held by a United Auto Workers health-care retiree trust; the governments of Canada and Ontario; and the remnants of GM's bankrupt predecessor, now known as Motors Liquidation Co.

Liddell would not predict how much of the remainder would be repaid through a stock offering but said it likely would take years for the government to divest itself of the 61 per cent share of the automaker it took in exchange for the aid.

GM said in February it has slashed $10.7 billion from annual costs, freeing up money for marketing and vehicle upgrades.

Liddell, 51, left Microsoft, with aspirations of becoming a CEO.

New GM CEO Ed Whitacre Jr. said Liddell would be a candidate for the top job, but that was before Whitacre took the post himself.

Liddell said his new job is a challenge and would not say much about whether he would like to succeed Whitacre.

Noting he had other opportunities that paid more and would have been less difficult, the executive said he was attracted by the challenge and importance of helping resurrect GM because it affects the lives of millions of people.

"Other than that, it was an extremely rational decision," he joked.

GM accountants will report 2009 and first-quarter earnings this month, using "fresh start'' accounting from the time it exited bankruptcy protection as a new entity.

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