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2 years after its IPO, GM is piling up cash

– Two years after a wounded General Motors returned to the stock market, the symbol of American industrial might is thriving again.

Sunday marks the anniversary of GM’s initial public stock offering in November 2010. The company has made money for 11 straight quarters, piling up more than $16 billion in profits.

But there are signs of trouble. GM’s U.S. sales, the prime driver of its profits, aren’t rising as quickly as the overall market. There’s been turmoil in the executive ranks, and the company – which has an Allen County truck plant and a Defiance, Ohio, foundry – is hemorrhaging cash in Europe.

A look at developments since the IPO:

Achievements

Big profits: GM is making money – nearly $4 billion so far this year. Most of that came from the U.S., where GM cars and trucks are selling for almost 6 percent more than they did in January 2011. The average selling price is $32,662, says the TrueCar.com auto pricing site. GM also is making good money in China and the rest of Asia.

Better cars: Before its 2009 bankruptcy, GM relied on trucks and SUVs to make money. Since bankruptcy, the company has rolled out new compact, subcompact and mini cars that are selling well. Car-based crossovers also are selling. Trucks accounted for 32 percent of GM sales in 2008, with cars and crossovers making up 68 percent. Now, trucks are down to 27 percent. Chevrolet Cruze compact sales are closing in on 200,000 through October, far better than GM’s previous compact and a strong counterpunch to Toyota and Honda. Also, the Chevy Sonic, the only subcompact made in the U.S., has become the top car in its segment.

Cash pile: Early in November, GM took out $11 billion in new credit lines, giving it access to more than $42 billion. The giant figure leads many analysts to believe that GM is preparing to buy back at least part of the U.S. government’s 26.5 percent stake in the company.

New lineup: As it headed into bankruptcy, GM cut spending on research. So for much of the past two years, the company had few new models. Now it’s spending millions to update or replace 70 percent of its North American lineup by the end of next year.

Struggles

Stock price: Shares of GM sold for $33 when the company re-entered the stock market on Nov. 18, 2010. For a few months, everything looked good. The stock peaked in January 2011 at almost $39. But then the bottom dropped out and the shares tumbled. In July 2012, they hit a low of $18.72, weighed down by a slowing U.S. economy and troubles in Europe. They’ve recovered some since but are still almost 30 percent below the IPO price. That means the U.S. government can’t sell its 500 million shares in the company without losing billions. GM shares would have to sell for $53 each for the government to break even.

U.S. market share: GM’s share of the critical U.S. market has dropped to 18 percent from 22 percent since the end of 2008. That means rivals like Toyota are taking away buyers who used to drive a Chevy, Buick, Cadillac or GMC. There are more troubling signs ahead. GM’s U.S. sales are up only 3.6 percent this year, far behind the 13.8 percent growth of the overall market. GM blames that on having the oldest model lineup in the market.

Europe: GM has lost $16 billion in Europe in the past 12 years, but it’s trying to resuscitate the business with cost cuts and new products. CEO Dan Akerson said this week that European operations are making progress toward profitability and he expects them to break even before taxes by the middle of this decade. Reaching that goal will be tough, though.

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