General Motors shares have climbed $2.29 at the time of this writing, as the company’s Q3 2012 earnings were better than what was predicted by Wall Street. But the financial results may only be part of the reason traders have warmed up to The General’s stock, as an underlying factor may very well be the company’s plans to further trim its European workforce.
As of this year, the company cut 2,300 jobs in Europe and is looking to trim another 300 in hopes to reduce costs and raise much-needed income. While this is arithmetic nobody likes to read or hear about, it does mean the company will be healthier financially, with most of the departures being voluntary or early retirements.
By the same token, GM predicts to break even before taxes by the middle of the decade in Europe. It has openly stated during today’s earnings call that losses this year could range from $1.5 billion to $1.8 billion, which is roughly double those seen in 2011. However, by the end of 2013, the losses seen by the operating unit are forecasted to be less than this year.