GM posts first profit in three years

General Motors, newly restructured after bankruptcy proceedings last year, announced on Monday its first quarterly profit since the second quarter of 2007, earning $865 million in the first three months of the year. Automotive News reports:

General Motors Co. posted a first-quarter profit as production snapped back and said it was making progress on a turnaround expected to put it on track toward its first full-year profit since 2004.

Analysts said the results underscored the progress GM made by slashing costs in a bankruptcy funded by the Obama administration and kept open the prospect of the automaker launching an initial public offering as soon as this year.

GM recorded a net profit of $865 million, compared with a loss of $5.98 billion a year before, as it ramped up production by nearly 57 percent from year-earlier levels to meet steadier demand in the United States and a sales boom in China.

This is very good news not only for GM and the auto industry but for the Obama administration as well, vindicating both the government’s rescue plan that helped get GM through bankruptcy and the severe conditions imposed on GM and the unions to cut debt and overhead in order to get that rescue plan.