GM Posts 3rd Worst Quarterly Results Ever

[Dragon]

http://money.canoe.ca/News/Other/2008/08/01/6327421-ap.html Edited August 1, 2008 by Dragon

[bowtie_dude]

You know what they say...its always darkest before the dawn...

[Newbiewar]

i guess they continue to suprise me with one time transactions...

[Dragon]

You know what they say...its always darkest before the dawn...

there are only a finite number of dawns before the sun goes nova as it were

[David]

Let's remind everyone here that GM had a HUGE Portfolio of products and has been selling off / slashing non core companies to get back to a lean fighting Auto builder only. As such, these one time charges are totally understandable to rid themselves of the parts companies, etc. Reality is this will hurt everyone but by 2010 we will see a profitable GM with an awesome assortment of vehicles.

As other reports have stated, with gas being cheap, a number of people, approx 1/3 of Truck / SUV purchases bought way to much truck / SUV for their real need. A cross over or Station wagon on Steroids like the SRX style is all these people really needed, but marketing being what it is sold what the people asked for and even Toyota got caught up in this with their Bomb of a Tundra.

So Let's keep everyone focused on the positive future that will come with a host of World Class Leading Hybrids and Newer Diesels. We survived WWII when the Japanease bombed us and won that war. The Japanease then said if they could not beat us by war they would do it Economically.

We can muster our strengths and hopefully get people to stop being selfish instant gratification and Buy American where ever possible to rise up and win the long term Global Economic battle of consumption.

Edited August 1, 2008 by dfelt

[Intrepidation]

The Horror.

Honestly, this kind of pain could have been avoided if they had given equal focus to small and midsize cars and not just trucks and SUVs. This goes for Ford and Chrysler too. Most of the automakers are hurting too, but I doubt anywhere near as much. Now they need small cars but have to develope them for our market, which takees time and money they don't have. That's all it boils down too.

Hopefully they can weather the storm and emerge with a hard learned lesson, so this never happens again.

[cire]

The Horror.

Honestly, this kind of pain could have been avoided if they had given equal focus to small and midsize cars and not just trucks and SUVs. This goes for Ford and Chrysler too. Most of the automakers are hurting too, but I doubt anywhere near as much. Now they need small cars but have to develope them for our market, which takees time and money they don't have. That's all it boils down too.

Hopefully they can weather the storm and emerge with a hard learned lesson, so this never happens again.

I totally agree. To ensure longevity and success, an auto manufacturer must continue to make great products to cover all market segments. Ford, GM, and Chrysler seemed to forget this at the height of truck/SUV mania. Now they are hurting much worse than some of their foreign counterparts.

What's so strange about the situation is that Ford and GM have excellent small cars that they offer in foreign markets, but never considered engineering these cars to comply with U.S. regulations just in case they would need to bring them here. The current Corsa is the most glaring example as far as GM is concerned. I also hope that the domestic automakers have learned their lesson and never get caught as unprepared as they have been since the bottom fell out of the truck/SUV market.

[BuddyP]

every quarter has a large "one time charge"

[prinzSD]

I totally agree. To ensure longevity and success, an auto manufacturer must continue to make great products to cover all market segments. Ford, GM, and Chrysler seemed to forget this at the height of truck/SUV mania. Now they are hurting much worse than some of their foreign counterparts.

What's so strange about the situation is that Ford and GM have excellent small cars that they offer in foreign markets, but never considered engineering these cars to comply with U.S. regulations just in case they would need to bring them here. The current Corsa is the most glaring example as far as GM is concerned. I also hope that the domestic automakers have learned their lesson and never get caught as unprepared as they have been since the bottom fell out of the truck/SUV market.

While I mostly agree, it must be remembered that others were caught as well, but not as dramatically. Both Nissan and Toyota were late too the big truck party. Should have they not forseen the downfall. Now Toyota has cut back on Tundra and Sequoia trucks, may cut the Avalon. Nissan will eliminate the Armada, QX45 or whatever it is called and their next big truck will basically be a rebadged Chrysler product. Hell, I just read this morning that Honda is cutting back production of the Odyssey mini van. The import misteps while not as large, nonetheless have been made as well. Honda is in the best position of all with the Honda/Acura lineup to do well in the forseeable future. I wonder how the niche product V-10 NSX will play out when it comes out. Will the media crucify Honda for bringing out such a car in todays environment.

[enzl]

Let's remind everyone here that GM had a HUGE Portfolio of products and has been selling off / slashing non core companies to get back to a lean fighting Auto builder only. As such, these one time charges are totally understandable to rid themselves of the parts companies, etc. Reality is this will hurt everyone but by 2010 we will see a profitable GM with an awesome assortment of vehicles.

As other reports have stated, with gas being cheap, a number of people, approx 1/3 of Truck / SUV purchases bought way to much truck / SUV for their real need. A cross over or Station wagon on Steroids like the SRX style is all these people really needed, but marketing being what it is sold what the people asked for and even Toyota got caught up in this with their Bomb of a Tundra.

So Let's keep everyone focused on the positive future that will come with a host of World Class Leading Hybrids and Newer Diesels. We survived WWII when the Japanease bombed us and won that war. The Japanease then said if they could not beat us by war they would do it Economically.

We can muster our strengths and hopefully get people to stop being selfish instant gratification and Buy American where ever possible to rise up and win the long term Global Economic battle of consumption.

GM has been selling the corporate equivalent of the family silver, not 'non-core' companies. GMAC, Allison aren't exactly "non-core" when GMAC provided most profits for years and Allison was involved with Hybrid Trannies and Heavy trucks...

You can't avoid the fact that without the profits from SUV/Pick-ups, GM hasn't made money in cars since the 60's...How is this management team (with record losses of market share) and hemoraging money left and right (Delphi $ hasn't stopped leaking, VEBA haven't been fully funded yet and tons of other suppliers are on the ropes --ie looking for a GM handout) going to stop if they don't know how to make money with cars?

What car is going to replace Silverado profit? Which crossover is going to replace Tahoe profits? Where is the $ for developing the Volt from scratch going to come from?--other products NOT being developed!

This management team needs to go. GM needs a Mullally -type that will take a real stab at changing GM. Cause I got news for ya...what they're doing isn't working.

(And before you rail on about gas prices or the economy--keep two things in mind---if you depend upon Gas Guzzlers to make $--wouldn't you have a Plan B developed when War is raging in the Middle East? And...they owned RESCAP (only the largest mortgage co. in the US)--you think they might have had an idea that a meltdown was starting?)

[Croc]

Blah blah blah...excuses excuses excuses...

FOR SEEMINGLY "ONE-TIME CHARGES," THERE HAVE BEEN AN AWFUL LOT OF THEM OVER THE PAST TWO YEARS!!

[Guest aatbloke]

every quarter has a large "one time charge"

These are known as "unusual items" - they can be either singular expected one-off charges, large non-recurring charges pertaining to asset dispositions, or a large unexpected charge to the P&L. They can occur for a host of reasons, and most large corporations have at least one a year. For a company the size of GM, one every quarter or half-year isn't outside the realms of possibility.

[Croc]

These are known as "unusual items" - they can be either singular expected one-off charges, large non-recurring charges pertaining to asset dispositions, or a large unexpected charge to the P&L. They can occur for a host of reasons, and most large corporations have at least one a year. For a company the size of GM, one every quarter or half-year isn't outside the realms of possibility.

No, but when press releases continually state "we'd be doing great on paper except for this ONE TIME charge" and then post these massive "one-time" charges every quarter, the spin doctoring becomes apparent.

[Satty]

The one-time charges are becoming as ubiquitous as the GM fanboys saying "it will get been when the new product arrives." We heard it before the last gen Malibu, before the last gen full-size trucks, before the current full-size trucks, before the Cobals, before the current CTS. And its just getting worse.

[Guest aatbloke]

No, but when press releases continually state "we'd be doing great on paper except for this ONE TIME charge" and then post these massive "one-time" charges every quarter, the spin doctoring becomes apparent.

A one-time charge is a non-recurring charge in the normal course of trading activities. You could have several such charges for different reasons within a couple of years or even the same year. GM's recent deferred tax write-off was a classic example.

It's nothing to do with spin doctors and everything to do with journalists not being accountants.

[daves87rs]

Well, It's not as bad as I expected. I was thinking that it was much worse than that......

As far as the automakers are concerned-you guys haven't seen the worse yet.

I've been preaching all along about the fallout in the ecomony...and it is going to get much worse before it gets better....

Looking at leasing-there is no longer a quick fit to get a car. People are simply going to hold on to their cars for a while. (I plan to)

Wait till you see how bad the credit crunch will be....not pretty.

There is going to be both a cut in car AND truck production soon.....

So now might be a good time to pay off your car, put a few bucks in it, and pick up that classic you've been eyeing...

[Intrepidation]

Ah, but according to McCain, the economy's fine!

[ehaase]

This management team needs to go. GM needs a Mullally -type that will take a real stab at changing GM. Cause I got news for ya...what they're doing isn't working.

What management team could do any better? What is Mullally doing, besides mortgaging almost everything the company owned back in 2006, that is radically different from what Wagoner is doing?

[Intrepidation]

What management team could do any better? What is Mullally doing, besides mortgaging almost everything the company owned back in 2006, that is radically different from what Wagoner is doing?

Making decisive decisions (converting truck plants tobuild Euro Fords for the NA market) VS sitting with their thumbs up their ass (we can build a CTS Turbo 4, but we don't now if customers want something that is better on gas and makes good power)?

[A Horse With No Name]

The Horror.

Honestly, this kind of pain could have been avoided if they had given equal focus to small and midsize cars and not just trucks and SUVs. This goes for Ford and Chrysler too. Most of the automakers are hurting too, but I doubt anywhere near as much. Now they need small cars but have to develope them for our market, which takees time and money they don't have. That's all it boils down too.

Hopefully they can weather the storm and emerge with a hard learned lesson, so this never happens again.

QFT.

Chris

[bowtie_dude]

Ah, but according to McCain, the economy's fine!

The economy is fine unless you were naive (read: stupid) enough to buy a house you couldn't afford or you're in debt up to your eyeballs.

[Satty]

Or if you're living on an income that allowed you to barely scrape by before gas hit $3.50/gallon and the price of milk, eggs, bread and just about everything else vital to sustaining life increased.

[Intrepidation]

Or if you're living on an income that allowed you to barely scrape by before gas hit $3.50/gallon and the price of milk, eggs, bread and just about everything else vital to sustaining life increased.

WHich is no doubt the case for a good junk of the population.

[Newbiewar]

I dont know who is worse...

the guy that allowed GM to float on bad vehciles, or is destroying GM by taking away its volume...

GM can sell much more then it is... it can be the discount automaker again... it can return the market place to its annual sales and reap the benifits... but rather it would idle plants? close them down...?

there are advantages to making things more efficent... but they are taking away the volume so the advantages are wasted and the money spent to take those advantages are wasted too... you cant squeeze the company on two fronts at once and expect things to go well

[smk4565]

I am surprised that $15 billion is only the 3rd worst quarterly loss. How could they have 2 worse than that? Losing $51 billion since 2005 is a staggering number, even if some is accounting and one time charges, that is a ridiculous amount to lose. They may not make it until 2010 when the labor deal kicks in, even when it does, I doubt it will be enough to solve the problem.

GM said, wait til the GMT900s arrived, then wait til gotta have products like the Solstice/Sky, and new Saturn lineup, then the Lambdas, then it was just wait til the CTS and Malibu come out. For 3 years it has been "wait til net year." Well all that new product came out and they are worse off than they were in 2004.

They have to address brand overlap and product mix. Which means less brands and less rebadging, more top of the class cars.