Good news today for General Motors: it generated its highest annual profit ever in 2011. That's $7.6 billion. And yes, you read that first sentence right: highest annual profit ever. Higher than when GM owned half the U.S. market. Higher than when it was the largest industrial concern on the planet.
This is remarkable for two reasons, one obvious, one not. First the obvious: three years ago, GM had to be bailed out by the taxpayer before entering bankruptcy. It was under fierce attack in North America from Toyota and others. The future looked, if not completely dim, then not exactly luminous.
Now the not-obvious. Most of GM's 2011 profit came from North America. Some analysts have pointed to this as a problem and highlighted GM's struggles with its main European division, Opel, which it decided to hold on to rather than sell, post-Chapter 11. (Other observers, notably Slate's Matt Yglesias, have complained that all the rah-rah around GM suggests that America is still too close to the auto-industrial business model that built the country in the 20th century.)
However, that's throwing cold water on GM needlessly. The fact that it made nearly $8 billion in the U.S., while maintaining an 18-20 percent market share, is stunning. North America is the toughest auto market there is. While in China or South America GM might be facing off against Volkswagen or Fiat, and in Europe against the Germans and Ford, at home it has to do battle with EVERYBODY.
Ford and Chrysler. Toyota, Honda, Nissan, Mitsubishi, Mazda, and Subaru. Mercedes, BMW, Volkswagen, and Audi. Hyundai and Kia. Even Fiat is back. Making money against that level of competition is a brutal undertaking.
And yet GM has done it, consistently now. The big question is: Will this result finally move the needle on the company's stock, which has been languishing at around $25 per share, and enable the U.S. Treasury to sell its remaining equity stake in the New General. Ideally, GM needs to go to $50 for that to happen. And that's at long last within the realm of possibility for 2012.