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General Motors reported a second-quarter loss of $3.2 billion today. Normally that's the kind of result that would worry company executives and scare off investors.
But as Jerome Vaughn of Detroit Public Radio reports, there's actually some good news in GM's earning report.
JEROME VAUGHN: General Motors' loss of $3.2 billion is more than three times as large as the loss posted in the second quarter of 2005. But company officials say the loss includes more than $4 billion in special one-time charges related to GM's aggressive downsizing plan. Earlier this year, the company offered financial incentives to convince blue-collar workers to retire early. More than 30,000 accepted. Without those charges, the Detroit automaker would have shown a profit of more than $1 billion. GM spokesperson Gina Proia.
GINA PROIA: We are very encouraged and pleased by the performance in the second quarter. Our global automotive operations were profitable on an adjusted basis and that's for the first time since 2004. We had a second consecutive quarter of record revenue.
VAUGHN: GM officials say their cost-cutting efforts will save the company $6 billion this year.
DAVID COLE: I think they are probably breathing a little bit easier. I'm not sure that they're going to be partying all over downtown Detroit.
VAUGHN: David Cole is the chairman of the Center for Automotive Research in Ann Arbor, Michigan. He says GM is finally seeing the results of its cost-cutting efforts. Cole says GM's loss last year of more than $10 billion pushed the automaker into acting more quickly.
COLE: Yeah, and what that crisis did is it led to a sense of urgency that enabled labor and management to come together and to restructure things like health-care costs, to deal with the buyouts. These are things that could not have been done absent a crisis.
VAUGHN: Wall Street investors also seem to be pleased with the news. GM shares rose more than $1.00 by late afternoon.
For NPR News, I'm Jerome Vaughn in Detroit.
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