GM (Government Motors) Reports a $1.3 Billion Profit

General Motors Co. reported Thursday a $1.3 billion second-quarter profit, a stark contrast to a year ago when the auto maker lost nearly $13 billion as it slid into bankruptcy.  The reason, as stated, is as follows: "The auto maker is capitalizing on a leaner cost-structure created through last year's U.S. government-orchestrated bankruptcy in which the company has fewer brands, employees and factories and a fraction of the debt it once held.  Meanwhile, growing demand in markets around the world and vehicles that commanded higher prices for consumers in the U.S. are driving up revenue."

Now, the real reason behind the second-quarter profit is simply padding sales figures with fleet sales.  Automotive News reports that while GM's sales are up 13%, the majority of those increases have come courtesy of fleet sales.  GM's fleet sales are reportedly up 53 % to 400,000 units, while its retail sales are up by 1%.  For the rest of the year, GM is projecting about 25% of its sales going to fleets for the year. 

If I could get the government to wipe out a large part of my debt and subsidize the purchase of my products, my revenue and profit would soar as well.  Therefore, let's see what kind of encore GM will provide for the second half of the year.  I, for one, don't think it will be as good as the first half.