GM caught with accounting error, shares hits a 23yr low, increase risk for bankruptcy

Discussion in 'OT Driven' started by mucky, Nov 10, 2005.

  1. mucky

    mucky .

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    :noes:


    GM shares fall on accounting error

    DETROIT (Reuters) - Shares of General Motors Corp. (NYSE:GM - news) fell more than 6 percent on Thursday, spiraling to a 23-year low, after Banc of America Securities warned of an increased risk of bankruptcy at the financially struggling auto giant.

    The stock's decline -- which could add to pressure on Chairman and Chief Executive Rick Wagoner to launch a more aggressive revival plan for the automaker -- also came after it said late on Wednesday that it had overstated financial results for 2001 by as much as $400 million.

    GM said the accounting error stemmed from the way it booked credits from suppliers. The accounting for credits from suppliers was one of the reasons GM was recently targeted for investigation by the
    Securities and Exchange Commission, the company said.

    In a note to clients, Banc of America analyst Ron Tadross said he was cutting his target price on GM to $16 from $18.

    Citing "increasing evidence that hidden liabilities exceed hidden assets" at GM, Tadross also said he was raising its risk of bankruptcy over the next two years to 40 percent from 30 percent.

    "Existing liquidity may only be enough to get through a bankruptcy reorganization," Tadross said.

    GM shares were down $1.68, or 6.78 percent, at $22.96 in mid-morning trading on the New York Stock Exchange after falling to a 13-year low on Wednesday.

    The Detroit-based Old Economy icon has lost about $3 billion this year as it grapples with high health-care and commodities costs, a steady erosion of U.S. market share and sputtering sales of big sport utility vehicles, its longtime cash cows, due to high gasoline prices.

    http://news.yahoo.com/s/nm/20051110/bs_nm/autos_gm_shares_dc
     
  2. Josepi

    Josepi HA HA, I CHANGED MY AV

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    it's not a bad thing. bankruptcy could yield suspension of those shitty union dealings they made in the past ;)
     
  3. glen5839

    glen5839 LS1 Elitist Prick Mod Super Moderator

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    the unions are killing that company.
     
  4. borborygmus

    borborygmus Guest

    yes sir!
     
  5. glen5839

    glen5839 LS1 Elitist Prick Mod Super Moderator

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    actually I think the unions are fucking them worse
     
  6. Off

    Off Memento Mori

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    I shorted them two weeks ago
     
  7. JzL

    JzL Hung like a Barbie™ Horse!

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    . The cars aren't that bad..
     
  8. therealciviczc

    therealciviczc New Member

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    Poor union contracts are the result of shitty management. A company's success or failure is a direct result of the way it is managed.
     
  9. Turbo

    Turbo FUUUUUUUUUUUUUUUUUUUUUUUUU OT Supporter

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    :rofl: and EDS are linked with them directly, what a surprise.
     
  10. AaronOC

    AaronOC Guest

    :bigthumb:
     
  11. mucky

    mucky .

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    You worked for EDS too? :noes:
     
  12. PsychoWes

    PsychoWes ಠ_ಠ

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    :werd: i :love: my silverado
     
  13. Turbo

    Turbo FUUUUUUUUUUUUUUUUUUUUUUUUU OT Supporter

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    :run: 4 years now.
     
  14. therealciviczc

    therealciviczc New Member

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    So what you really mean is the going labor rate in areas where GM houses its plants is too high for GM to make a profit. GM needs to either re-evaluate its employee needs or its pricing. Other car companies don't seem to be having problems to this extent, so obviously GM is doing something wrong.
     
  15. Supernoma

    Supernoma servus publicae OT Supporter

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    The build quality is on par with anything out of Japan, better then the Eurpoeans.

    Just sucks that they use cheap components.
     
  16. therealciviczc

    therealciviczc New Member

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    Please feel free to tell me how union contracts aren't a result of company management.
     
  17. Off

    Off Memento Mori

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    Tomorrow is my deadline to return the shares, I hope they do some more crazy shit :x:
     
  18. mucky

    mucky .

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    Every Day must Sucks for you. I'm sorry. :sadwavey:
     
  19. Turbo

    Turbo FUUUUUUUUUUUUUUUUUUUUUUUUU OT Supporter

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    :hs: It's not too bad. We have a steady stream of .NET work coming in so I'm happy to keep my hand in and learn a bit more for the moment. When I'm fully qualified, I'll fuck off.
     
  20. Mikey D

    Mikey D New Member

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    Uh maybe years back, hasn't been for quite a long time dude.
     
  21. mucky

    mucky .

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    I guess EDS over in the UK side isn't bad, but over on the other side of the ocean, it does suck bad. At least you guys get about 4 weeks of time off starting.


    Oh, and if you can't tell, I did work for that shitty company in the past, before the mass exodus after they change the severance package.
     
  22. Supernoma

    Supernoma servus publicae OT Supporter

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    Japan, Canda, Most of Eupore have socialized health care. GM is getting hosed on footing the bill for 1.1 million people's health care.

    UAW vehemently opposes any sort of consessions, it's a suprise they made consessions mid-contract.

    Look at the companies that have extensive retirees and current employees in the US... GM and Ford. Chysler has moved alot of is plants to Canada and Mexico.
     
  23. thewise1

    thewise1 Guest

    :hsugh:
     
  24. Turbo

    Turbo FUUUUUUUUUUUUUUUUUUUUUUUUU OT Supporter

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    Dick Brown's $40 million severance package for the lose.
     
  25. therealciviczc

    therealciviczc New Member

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    I just find it difficult to feel bad for a company that has made their own bed and now has to lie in it.
     

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