General Motors Co could post a profit in 2010 if the U.S. industry stages modest recovery but remains subject to the risk that the improving trend in the U.S. economy is reversed, the automaker's vice chairman, Bob Lutz, said on Monday.
Lutz, speaking to Reuters Television on the sidelines of the Detroit auto show, said GM would need to increase production this year to restock depleted inventories after extended plant shutdowns last year ahead of its government-funded bankruptcy.
Lutz said GM could be profitable if the U.S. auto market bounces to between 11 million and 12 million vehicles in 2010 as the automaker has forecast. That would be up from near 10.4 million U.S. auto sales on an industry-wide basis in 2009.
Depending on mix and depending on other expenses we would hope to make a profit on an operating basis, Lutz told Reuters. There may be some restructuring charges that could make the overall figure slightly negative. The truth is we don't know.
He said GM was aiming to return to profit in 2010. The automaker last posted a full-year profit in 2004.
GM has lost $88 billion since 2005.
But backed by over $50 billion in U.S. government aid, GM has slashed costs. It cut 34,000 jobs last year, eliminated $78 billion of debt and built up a cash hoard of almost $43 billion thanks to its bailout. It has also slashed its inventory of unsold cars and trucks.
We're going to try very hard, Lutz said, when asked about the goal of returning to profit in 2010.
GM's retail sales rose 7 percent in December and retail sales for its four remaining U.S. brands -- Chevrolet, Cadillac, Buick and GMC -- were up 13 percent.
GM's turnaround plan is still at risk for a reversal of the improving trend in the U.S. economy, Lutz said.
Then, of course, all bets are off, he said.
(Reporting by Kevin Krolicki, editing by Dave Zimmerman)