General Motors to pay first dividend since 2008

Mary Barra at the Detroit Motor Show General Motors has also been helped by a recovery in the US car market

US carmaker General Motors (GM) said it will resume dividend payments, capping a remarkable turnaround since its 2009 bailout by the US government.

It will pay a dividend of 30 cents per share, the first since July 2008.

GM filed for bankruptcy at the height of the global financial crisis and was rescued after the government pumped in billions of dollars.

But the firm has since seen a strong recovery, led by a jump in sales in key markets such as the US and China.

On Tuesday, the firm said it sold 9.71 million vehicles in 2013, an increase of 4% on the year before.

"This return to shareholders is consistent with our capital priorities, and is an important signal of confidence in our plans for a continuing profitable future," Dan Ammann, GM's chief financial officer, said in a statement.

'Exceedingly well'

Start Quote

They are doing exceedingly well in countries like China and India, as they have come with models that are better suited for developing markets”

End Quote Vivek Vaidya Frost & Sullivan

GM, like other global car makers, has benefited from the ongoing recovery in the global car market.

Car sales in key markets such as China and US have been rising - recovering from the slump seen in the years following the global financial crisis.

According to data released over the past few days, auto sales in China, the world's biggest car market, jumped 14% in 2013 to 21.98 million vehicles.

Sales in the US - the world's second-biggest market - are also expected to have hit 15.6 million units last year - up from 10.4 million units 2009.

Analysts said that GM had been able to tap into the growth in both the emerging as well as developed economies, which had helped boost its recovery.

"They are doing exceedingly well in countries like China and India, as they have come with models that are better suited for developing markets," Vivek Vaidya, an auto analyst with consulting firm Frost & Sullivan told the BBC.

Mr Vaidya added that a recovery in demand for pick-up trucks and similar vehicles in the US had also helped GM.

"They are currently winning on all fronts." he said.

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Business Live

  1.  
    09:26: Greece
    Athens

    Greece has paid the first €310m (£223m) instalment of an International Monetary Fund (IMF) loan that falls due this month. The government must pay a total of €1.5bn to the IMF this month over two weeks starting today. Prime minister Alexis Tsipras is reported to have asked for a meeting with European Commission chief Jean-Claude Juncker about the payments.

     
  2.  
    09:09: Eurozone bonds

    Government bond yields in Portugal, Italy and Spain fell to new record lows on Friday, a day after the ECB gave details of its bond-buying plans. Portuguese 10-year yields fell 12 basis points to 1.7%, while Italian and Spanish equivalents fell 5 points to 1.28% and 1.19% respectively. The ECB starts buying government bonds on Monday in a bid to boost growth in the eurozone.

     
  3.  
    Thomas Cook Via Twitter

    Dominic Walsh of The Times tweets: Question is whether, as with Club Med, Fosun has longer-term aim to use minority stake in Thomas Cook as basis for eventual full bid @walshdominic

     
  4.  
    08:47: Market update

    The FTSE 100 Index is 8 points lower at 6,953. Shares in Weir Group are the biggest riser this morning on speculation that the engineering firm may be a bid target following a recent slump in its share price.

     
  5.  
    08:31: Thomas Cook
    Thomas Cook

    Fosun, a Chinese investment firm, has bought a 5% stake in Thomas Cook for £91.9m and plans to increase its holding further. The move follows its purchase of French resort operator Club Med last month. Shares in Thomas Cook have soared 16% higher to 140p.

     
  6.  
    08:17: RBS shares

    Just worth point out that RBS shares are trading at 376.9p and the government needs to sell its stake at an average of 455p per share just to break even on the money it pumped into the bank in 2008 and 2009. Also worth mentioning: Mr Osborne may not be Chancellor after May.

     
  7.  
    08:03: RBS shares
    RBS

    George Osborne has told the Financial Times he made a mistake in not radically restructuring taxpayer-owned Royal Bank of Scotland soon after he came to office in 2010. But the chancellor says he would like to proceed "as quickly as we can to get rid of it" after the general election.

     
  8.  
    07:50: AGA profits

    AGA says operating profit stood at £9.6m, but it booked £4.1m in pensions charges, £3.3m in fair value costs relating to its stake in Fired Earth - its tiles business - leaving it with £2.2m. But that's before £1.5m in net interest charges on its pensions deficit, which doubled in the year from £35m to £72m. That brought pre-tax profits down to just £700,000, and left AGA in no position to pay a dividend. But the company does expect market conditions to improve this year.

     
  9.  
    07:39: Vodafone
    The Hoff

    Vodafone has announced a plan to introduce a mandatory minimum maternity policy in all 30 countries in which it operates. By the end of 2015, all female employees will be offered at least 16 weeks fully paid maternity leave, as well as full pay for a 30-hour week for the first six months after they return to work. David Hasselhoff, however, will not be eligible.

     
  10.  
    07:27: AGA profits
    AGA Rangemaster

    AGA Rangemaster has reported a slight fall in an annual pre-tax profit to £700,000, compared with £1.1m a year earlier. It has also announced it will not be paying a dividend to shareholders.

     
  11.  
    DFS shares Via Twitter

    Retail analyst Nick Bubb tweets: The Chairman of DFS trumpets that it stands for "Dedication, Family and Success". Or Dull Furniture Sale? ;-) @NickBubb1

     
  12.  
    07:15: DFS shares
    DFS

    Buy one, get one half price! Furniture retailer DFS has priced shares at 255p - at the lower end of expectations. The stock starts trading at 0800 today and means the company will be valued at close to £550m.

     
  13.  
    07:02: Eurozone outlook BBC Radio 4

    One thing that may help the eurozone economy is a small but significant accomplishment by the ECB that appears to have gone largely unnoticed. That was last Autumn's asset quality review of the banks, by the ECB which "gave pretty much everybody a clean bill of help", says Mr Cameron Watt. "And that's allowing banks to sell assets off their balance sheets."

     
  14.  
    Greek economy Via Twitter Adam Parsons Business Correspondent

    Former Greek shipping minister @MVarvitsiotis tells #WUTM "we'll do whatever it takes...to stay in Eurozone...leaving would be a disaster" @AdamParsons1

     
  15.  
    06:47: Eurozone outlook BBC Radio 4
    Draghi

    Mr Cameron Watt tells Today: "There is a following wind which is the lower oil price and the material decline in the currency [euro] against the dollar". He says those factors should help boost the eurozone economy, although he he sceptical that it will do as well as ECB president Mario Draghi (pictured) suggested at his press conference on Thursday.

     
  16.  
    06:35: ECB bond buying BBC Radio 4
    The EURO logo is pictured in front of the former headquarter of the European Central Bank

    We're talking quantitative easing (QE) on the Today programme and why it pushes up stock markets. And Ewan Cameron Watt, global chief investment strategist at BlackRock, explains in the most clear terms. It is all about portfolio substitution, of course. "If I buy a whole lot of bonds and give you cash, you have now have to invest that cash," he says. "You don't want to buy bonds because of [current] negative yields, so it forces you to buy riskier assets, which inflates the prices of things like equities." Simples.

     
  17.  
    06:25: Alpacas! Radio 5 live
    Alpacas

    Let's face it - alpacas are a bit weird. But farming the cuddly critters appears to appeal to some who want to escape the rat race, alpaca farmer Mary-Jo Smith tells Wake Up to Money. She says alpaca wool is strong, luxurious and "just amazing to wear". The British Alpaca Society holds its annual show in Telford this weekend.

     
  18.  
    06:15: Insurers v banks Radio 5 live

    Aviva shares ended 7% higher yesterday and Ewen Cameron Watt, chief investment strategist at BlackRock, tells Wake Up to Money it is no surprise that insurers are doing better than banks. He says operating conditions for banks are getting tougher, but some insurers are opting to join forces.

     
  19.  
    06:05: Rangers FC
    A general view of the Ibrox Stadium, in Glasgow,

    It's a big day for Rangers FC as the club holds an emergency meeting where Dave King hopes to oust the board. However, there are question marks over King - who wants to become chairman - because of his convictions in South Africa for tax offences.

     
  20.  
    06:03: Matthew West Business Reporter

    Happy Friday everyone. Don't forget you can get in touch by email at bizlivepage@bbc.co.uk or via twitter @bbcbusiness.

     
  21.  
    06:00: It's Friday Chris Johnston Business Reporter

    Good morning and welcome to the last day of the working week. US unemployment figures are set to dominate the day and are out at 13:30. We'll bring you the reaction to those numbers and all the day's other business news as well.

     

Features

  • Replica of a cargo boxSpecial delivery

    The man who posted himself to the other side of the world


  • Cartoon of women chatting on the metroChat wagon

    The interesting things you hear in a women-only carriage


  • Target practice for Lithuanian troopsBaltic shiver

    Europe editor Katya Adler on the alarm at Russian muscle-flexing


  • Ruben ReuterRuben returns Watch

    Child TV star with Down's syndrome on life away from home


Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.