GM Loses 15.5 Billion Dollars for the 2nd Quarter of 2008

Discussion in 'OT Driven' started by TriShield, Aug 1, 2008.

  1. TriShield

    TriShield Super Moderator® Super Moderator

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    GM posts $15.5 billion 2nd-quarter loss

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    Aug 1, 8:04 AM (ET)
    By TOM KRISHER and DEE-ANN DURBIN

    DETROIT (AP) - General Motors Corp. (GM) said Friday its losses widened to $15.5 billion in the second quarter as North American sales plummeted and the company faced expenses due to labor unrest and its massive restructuring plan.

    The loss of $27.33 per share is the third-worst quarterly loss in the automaker's history. In the same period a year earlier, GM recorded a net profit of $891 million, or $1.56 per share.

    Revenue for the April-June period was $38.2 billion, down $8.5 billion from a year earlier.

    The company said its loss included $9.1 billion in one-time charges, including $3.3 billion for the buyouts of 19,000 U.S. hourly workers who left at the end of June and $2.8 billion in liabilities related to Delphi Corp. (DPHIQ), its former parts division.

    It also included $1.3 billion worth of write-offs because of a decline in the value of GMAC Financial Services' portfolio of trucks and sport utility vehicles. GM owns 49 percent of GMAC, which has suffered big losses when leases end and it tries to sell the now-unpopular vehicles at depressed prices.

    GM also took a $197 million charge related to the settlement of a nearly three-month strike at supplier American Axle and Manufacturing Holdings Inc., which shut down more than 30 GM plants. GM agreed to help American Axle fund worker buyouts as part of the settlement.

    Without the one-time charges, GM lost $6.3 billion, or $11.21 per share. Twelve analysts surveyed by Thomson Financial predicted a $2.62 per share loss on revenue of $44.57 billion.

    GM shares fell 7.4 percent to $10.25 in premarket trading from a close of $11.07 Thursday.

    Ray Young, GM's chief financial officer, said the company burned through $3.6 billion in cash during the second quarter, which he attributed largely to reducing the company's inventory by nearly 90,000 vehicles to less than 800,000.

    He said GM does not expect a similar reduction in future quarters, so the cash burn should be smaller for the rest of the year.

    "In that respect, the negative cash flow in the second quarter is overstated," he said.

    Young said GM ended the quarter with $21 billion in cash and $5 billion available through credit lines for total liquidity of $26 billion, which he called a strong position.

    The company already has announced plans to generate another $15 billion in liquidity in the next 18 months, he said.

    "We're going to get the second quarter behind us and just move ahead," he said.

    The $15.5 billion loss is less than half GM's record $38.6 billion loss in the third quarter of last year. That loss was due to a charge for accumulated deferred tax credits. The second-worst loss was $21 billion in the first quarter of 1992.

    GM said its revenues outside North America rose by $1.7 billion to $20.8 billion in the quarter, but those gains were more than offset by losses in North America, where high gas prices and the weak economy have wreaked havoc on the auto industry.

    North American revenues fell by nearly $10 billion to $19.8 billion for the quarter as sales in the region fell 20 percent. Work stoppages at American Axle and several other facilities in May and June also contributed to the decline, GM said.

    On July 15, GM announced a plan to raise $15 billion for its restructuring by laying off thousands of hourly and salaried workers, speeding the closure of truck and SUV plants, suspending its dividend and raising cash through borrowing and the sale of assets.

    GM also said it would reduce production by another 300,000 vehicles, and that may prompt another wave of blue-collar early retirement and buyout offers, Young said.

    "As our recent product, capacity and liquidity actions clearly demonstrate, we are reacting rapidly to the challenges facing the U.S. economy and auto market, and we continue to take the aggressive steps necessary to transform our U.S. operations," GM Chairman and Chief Executive Rick Wagoner said in a statement.

    GM sold 2.29 million vehicles in the second quarter, down 5 percent compared with the previous year. The company said a record 65 percent of those sales were outside North America.

    For the first half of the year, Toyota Motor Corp. (TM) outsold GM by 277,532 vehicles. It was only the second time Toyota beat GM in sales for the first six months of a year.

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  2. you know me

    you know me OT where the douchbags play

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    maybe exxon can help them out a bit
     
  3. TriShield

    TriShield Super Moderator® Super Moderator

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    GM Loses $15.5b in Q2

    By Robert Farago
    August 1, 2008

    That's a lot of billions. Of course, GM camp followers will do the usual math, discounting "one time" charges to paint a more palatable picture of pissed-away profits. The New York Times does the math for those so inclined.

    "According to the earnings statement, the loss included $9.1 billion in one-time charges, $3.3 billion of which was for employee buyouts… Included in the results, the statement said, was $1.3 billion in write-offs that reflect the drop in value of trucks and sport utility vehicles in GMAC Financial Services’ portfolio… Excluding one-time charges, G.M. had a loss of $6.3 billion or $11.21 a share, compared with income of $1.3 billion or $2.29 a share in the same period last year."

    And still the spin is spun. "We have the right plan for G.M., driven by great products, building strong brands, fuel-economy technology leadership and taking full advantage of global growth opportunities," GM CEO Rick Wagoner asserted. His optimism is based on this startling stat: "North American sales were down 20 percent, or 236,000 units, while sales outside of North America grew by 10 percent or 116,000 units. A record 65 percent of G.M.’s sales for the second quarter were outside the United States, the company said, while global market share was 12.3 percent, down 0.9 percent because of the weakness in North America."
     
  4. TriShield

    TriShield Super Moderator® Super Moderator

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    GM Drops 27.7 Percent in July

    By Frank Williams
    August 1, 2008

    GM wants you to know the not-so-very-new-anymore Chevy Malibu's total sales were up 79 percent in July. The penalty box known as the Chevy Aveo was up 17 percent. The Saturn Aura was up 24 percent. And Cadillac CTS sales were up 38 percent. That's what they put in the bold print right at the top of their July sales press release. However, down in the body you find the real story: overall sales were down 27.7 percent.

    The auto side's uptick was more than offset by a whopping 41.5 percent drop on the truck side. Something else that's easy to miss is the word "total" in front of some of the sales numbers (like Malibu above). When GM's spinmeisters talk about great "retail" sales of some models, that's a sure sign that fleet sales made up the bulk of the "total" sales mentioned for other models. Just like the numbers other manufacturers show in press releases, these numbers have been adjusted for the number of "sales days;" unadjusted numbers aren't available yet.
     
  5. MeanGreen

    MeanGreen New Member

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    drop in the bucket
     
  6. Run N. Gun

    Run N. Gun Active Member

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    Err, that's still a lot of jobs at stake. :noes:
     
  7. Fordgasm

    Fordgasm Mike Trout > All

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    GM is burning through the 30 billion or so cash they have stockpiled up very quickly. They'll be belly up soon and looking to the fed for help.

    what did they expect when all they sold were trucks and SUVs? :ugh:
     
  8. deusexaethera

    deusexaethera OT Supporter

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    I like the "Limited Time: $10,000 Off!" sticker. That's a great way to run a business.
     
  9. art_VW_shark

    art_VW_shark OT Supporter

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    this is due in part to the fact that their fuel sippers are under advertised, and in the case of teh aveo, underdesigned.
     
  10. JM Popaleetus

    JM Popaleetus OT Supporter

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    Kind of...

    More due to the fact they can't sell from the 90's GM stigma, the UAW (and retirees like my Grandpa), and competition from Hyundai and Toyota who can afford to sell their cars for nothing and still make a profit.

    The Aveo is not under-designed for what it is, it's main competition is the Accent, and the Accent is worse in quality IMHO. The problem is, the Accent also costs half the price.

    However, at least in CT, GM is pushing commercials hard. And the GM dealerships have all the Hybrids, Malibu's, etc. out front.
     
  11. JM Popaleetus

    JM Popaleetus OT Supporter

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    GM will be around for the next 100 years. IF they do go bankrupt, it would actually be a good thing. They'd be able to start out fresh, and not much else would happen besides manufacturing of quality cars.

    And remember, no reason not to make Trucks and SUVs when that's what sold the past few years. It was Q2 '07 and 08 which was killer on the gas.

    Also, GM could easily get rid of their stockpile of trucks. Sell them at cost, executive pricing.
     
  12. deusexaethera

    deusexaethera OT Supporter

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    For all we know, that's exactly what the execs have in mind. Go bankrupt, cancel all contracts and obligations, and start over. Some of the shit they got roped into by their contract lawyers is really hurting them now.
     
  13. art_VW_shark

    art_VW_shark OT Supporter

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    wat
    they're neck and neck price wise. I can't attest to accent quality, my uncle's aveo is epicfail.
     
  14. JM Popaleetus

    JM Popaleetus OT Supporter

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    Most likely IS the plan. It makes sense... And is good for potential stock buyers.

    I'll sure as hell buy all I can afford at ~$0.01-$5 a share.
     
  15. JM Popaleetus

    JM Popaleetus OT Supporter

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    I can walk into a Hyundai dealership with $5k and get a $10k Accent, no problem.
     
  16. deusexaethera

    deusexaethera OT Supporter

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    Good point.
     
  17. 0wn3d_productivity

    0wn3d_productivity OT Supporter

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    I suppose this is what they get for making primarily garbage.
     

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