Is GM's Automotive Division Profitable?

The question and answers section of the most recent conference call was broken into two portions. First the analysts got to ask their questions, then the reporters. One of the reporters asked bluntly if GM made money selling cars in Q4 and if they made money selling cars in North America. It was a good question in concept (although it was easy for management to twist the numbers to show profitability in the division because of all the recent write-offs). Since a majority interest in GMAC has been sold, GM's automotive profitability becomes especially important.

In the 2004 10-K, GM reported the following #s for "Automotive and Other" division:
2002 -$146 million
2003 +$995 million (would have been negative if not for a $1.179 billion gain on sale of discontinued operations)
2004 -$89 million

Meanwhile, all the company's profits were in GMAC:
2002 +$1,870 million ($544 million mortgage profits)
2003 +$2,793 million ($1,254 million mortgage profits)
2004 +$2,913 million ($1,108 million mortgage profits)

In the 2005 10-K, Auto showed a huge loss on write-downs:
2005 -$12,816 million
while GMAC reported another big profit:
2005 +$2,356 million ($1,345 million mortgage profits)

In the 2006 10-K, Auto showed another big loss:
2006 -$3,168 million
while GMAC reported another net profit:
2006 +2,175 million

Maintaining an appearance of profitability will be essential for keeping GM's creditors happy going forward. If (and how long) they can do this will be the subject of future posts.