During Q4 2014, GM posted a pre-tax profit of $2.4 billion, up $500 million compared to the third quarter of 2013. Spurred by stronger pricing in major markets and robust sales of pickups and SUVs in North America, the results represent GM’s best fourth quarter since emerging from bankruptcy in 2009. For the full 2014 calendar year, pre-tax profit was $6.5 billion, down $2.1 billion compared to calendar year 2013 due to recall-related expenditures.
But as GM as a whole posted notable growth, its European operations continued to post significant losses, bleeding more money in 2014 than in 2013. GM Europe posted a $393 million loss during Q4 2014, a loss increase of 7 percent or $27 million over Q4 2013.
General Motors Europe Financial Results - Q4 2014
|Q4 2014||Q4 2013||Q4 2014 - Q4 2013||% CHANGE Q4 2014 / Q4 2013|
|-$393 million||-$366 million||-$27 million loss increase||+7% (loss increase)|
For the full 2014 calendar year, GM Europe posted a $1.37 billion loss, a loss increase of 52 percent, or $471 million.
General Motors Europe Financial Results - 2014 Calendar Year
|CALENDAR YEAR 2014||CALENDAR YEAR 2013||2014 - 2013||% CHANGE 2014 / 2013|
|-$1.37 billion||-$899 million||+$471 million loss increase||+52% (loss increase)|
GM Chief Financial Officer Chuck Stevens attributed the losses to the economic troubles experienced affecting Russia, where a weaker ruble and slumping economy has made it more challenging for consumers to pay for new vehicles, resulting in slowing new vehicle sales. GM sells vehicles from its Chevrolet, Cadillac, and Opel brands in the country.
“As we go through 2015, Russia will continue to be a headwind,” Stephens said to reporters in early February at GM’s headquarters in Detroit. “But we’ve taken and will continue to take aggressive action to mitigate those issues.”
To mitigate the situation in Russia, GM has laid off plant workers and will suspend its manufacturing operations at its plant in St. Petersburg for roughly two months. The automaker has also adjusted prices of its vehicles to offset the devaluation of the ruble.
Comprised of Opel and Vauxhall brands, GM Europe hasn’t turned a profit for well over a decade. Since emerging from bankruptcy in 2009, the automaker has been working to turn around the division’s financial fortunes. In 2013, the firm was working towards breaking in the region in 2015, and becoming profitable in 2016. But in December, GM Europe chief, Karl-Thomas Neumann, stated that the 2016 profit target was threatened by economic challenges. Meanwhile, GM CFO Stevens reiterated the 2016 profitability objective.