Chris_Doane

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35 posts in this topic

VenSeattle    8

IIRC, GM made it known the wide difference (several billions of dollars) between best & worst case scenarios with Delphi's bankruptcy. I'm sure it has something to do with that.

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Guest buickman   
Guest buickman

A FOOL AND OUR MONEY

Here it is folks, proof positive that things only get worse the longer "Red Ink Rick" remains at the helm. It's time for the shareholders, employees, and dealers to band together and demand the removal of this buffoon.

Buickman

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Shantanu    0

A FOOL AND OUR MONEY

Here it is folks, proof positive that things only get worse the longer "Red Ink Rick" remains at the helm. It's time for the shareholders, employees, and dealers to band together and demand the removal of this buffoon.

Buickman

I'm going to agree with you that people have been fired at other companies for far less than what Rick Wagoner, Bob Lutz, etc. have done.

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Guest buickman   
Guest buickman

Meanwhile, back on the Watch...

>From Dealer Magazine and my friend Jim Ziegler:

"Maybe I’m a little confused here. One of the reasons General Motors is in trouble is because it can’t meet its “legacy debt” obligations. It has got all of these “blood-sucking retirees” dragging them down.

OK…OK…let’s talk about ‘blood-suckers’ for a moment. Now remember, I’m just a high-school graduate from the bad side of Jacksonville. But, I’ve been reading The New York Times and Reuters about how Rick Wagoner has gotten himself set up to receive a $4.6 million retirement package that is separate and exempt from the under-funded GM employee retirement plan. By the way, that’s nearly twice what he’s now making. The New York Post actually called Wagoner “the greediest, most undeserving CEO since Chainsaw Al Dunlap.”

Wagoner’s “golden parachute” comes from an accounting legal device sleight-of-hand called the Supplemental Executive Retirement Plan, a fund that is exempt if GM declares bankruptcy.

According to The Post, the General Motors pension fund is under-funded by more than $45 billion. But Wagoner will skate free in the event of a bankruptcy and still receive his multi-million-dollar pension even though the retirees who sweated blood for their entire productive lives would be totally screwed and destitute.

Now, I’m not going to call Rick Wagoner names. That wouldn’t be fair. I would prefer to let his profitability track record speak for itself and then allow you to make your own educated decision.

Personally, I think Wagoner should be ashamed. But, instead, he’s still attending his black-tie cocktail parties and making speeches. How can anyone continue a charade of honorability and decency knowing what he’s done? He’s so far into the stratosphere from where the rest of us normal people live. He can no longer relate to us or his customers. This man is worthy of my highest personal ridicule and contempt but he just doesn’t get it. Of course, this is all just my personal opinion based upon what I’m reading in The Times, The Post, and Reuters. I might be wrong.

I am writing this on February 4 hoping Wagoner isn’t lined up before a firing squad before this gets to press in March."

Of course, it seems to have become a commonplace trend for these “Ivory Tower” prima-donnas to leave the company in shambles and ride off in the sunset with the family jewels—a la Jacques Nasser. In the case of the recently bankrupt Delphi Corporation—although, the workers are near-rioting over pay and benefit cuts and threatening to strike—it seems that CEO J.T. Battenberg has also lined himself up with one of those Rick Wagoner deals. Battenberg gets a $1.6 million annual retirement package exempt from the bankruptcy.

All of this is sort of reminiscent of Marie Antoinette saying…“Let them eat cake.”

(You know, I should have seen it coming. Months ago, perhaps as early as last May, I began writing and speaking about how General Motors was advertising on Edmunds.com.)

Here’s the biggest sellout of the entire equation. When the announcement was made to cut margins, there was also a tie-in to the General’s new marketing strategy with Edmunds. This sellout of its dealers has been in motion for many months…it’s not as recent as you might think.

I was just reading some literature on Edmunds.com from the editors of Edmunds titled, The Truth Behind Dealer Holdback. It is an article educating consumers that they should use the dealer holdback in their negotiating. There is a chart showing exactly how much percentage of holdback each manufacturer has in their invoice…and another chart showing current dealer cash allowances for every make and model…and what stair-step incentives the dealer might qualify for.

In other words, as I have said repeatedly, Edmunds.com is the most anti-dealer (probably communist) web site in the entire known universe (my personal opinion based on knowing a snake when I see it). And now, here we have General Motors heavily supporting it financially. This just ain’t right!

I am convinced that all of this misguided “transactional pricing” crap that Mark LaNeve and the other alleged corporate zombies are spouting is coming directly from Edmunds.com. The bottom line is that Edmunds.com has positioned itself as the new industry leader in consumer research that the manufacturers are listening to. It seems as if Edmunds is rapidly replacing J.D. Power and Associates as the go-to source for consumer information.

Here’s the Ziegler take on all of this: Conceivably, these people at Edmunds might be raving idiots, granola-eating car liberals, and card-carrying morons…but…of course, I will have to wait and reserve judgment. Let’s see if General Motors continues to dive deeper into the toilet guided by its advice and advertising before I make a conclusive statement. I am taking bets.

Cracking up now…a Ford dealer told me this one. I’m sure everyone is aware that General Motors is celebrating beating Ford in car sales last year. Well, my dealer friend said that Ford Motor Company getting beaten by General Motors in car sales was like getting sand kicked in your face by a chemo patient.

You know I do business as a trainer and consultant for a lot of Toyota dealers. Month after month, I receive a lot of e-mails and phone calls asking why I don’t write more about Toyota. Well, I gotta tell ya. The truth of the matter is there aren’t a lot of negative things to say about Toyota.

Recently, Mark LaNeve at GM was quoted as blaming all of GM’s recent failures on hurricanes, the war in Iraq, oil prices and interest rates. You know, I didn’t see any negative quotes by Jim Press at Toyota. His company was gaining market share during the same times with the same economic hardships that LaNeve was whining about."

Well said Mr Ziegler, thanks for helping to carry the torch!

Buickman

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Newbiewar    1

A FOOL AND OUR MONEY

Here it is folks, proof positive that things only get worse the longer "Red Ink Rick" remains at the helm. It's time for the shareholders, employees, and dealers to band together and demand the removal of this buffoon.

Buickman

I'm going to agree with you that people have been fired at other companies for far less than what Rick Wagoner, Bob Lutz, etc. have done.

i believe if he was corrupt as Jim often portrays him.. Kirk would not have so much money at stake...

but I do beleive, that he wont last too much longer if certain things do not start showing way...

in 2005 they knew it was a bad year, they tacked on lots of union expenses and what not... delphi... a rushed GMT900 development... what else?

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ZL-1    160

Was this restatement a direct result of the SEC's investigation, or could that investigation lead to further restatements?

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Ghost Dog    1

GM raises 2005 loss by $2 billion

DETROIT (Reuters) -- General Motors on Thursday said its 2005 loss was $2 billion deeper than previously reported due to charges related to factory job losses, its finance arm GMAC and the bankruptcy of former subsidiary Delphi Corp.

GM also said it would delay filing its annual report with securities regulators because it had mistakenly accounted for cash flows from a mortgage subsidiary of GMAC called ResCap. It will also restate results from 2000 to 2004 due to ResCap.

The massive loss for 2005, revised to total $10.6 billion, represented almost 85 percent of the current market value of the top U.S. automaker as of the close of trade on Thursday.

At $18.69 per share, the loss was also just shy of GM's closing price at end December after a year-long slide that cut the stock's value by more than half.

Because of the delay in filing GM's revised annual report, it was impossible to know how the increased charges would affect the $16.8 billion in cash GM's auto operations held at end December.

Shares in GM closed on Thursday at $22.22 and have gained almost 16 percent this month on signs that the company was making progress in its turnaround efforts. In after-hours trade the stock slipped about 1 percent to $22.

One analyst said it was encouraging that GM had raised its estimate of the cost to resolve problems at Delphi since that could suggest a resolution that would avoid a crippling strike.

GM said its mortgage-related accounting problem would not change reported net income, but could change its statement of cash flows at ResCap, GMAC and the parent company.

GM said it expected to file its annual report with the U.S. Securities and Exchange Commission within the next two weeks.

MORE COSTS FOR JOB LOSSES

Among the revisions, GM said it was taking a $1.7 billion charge as it shuts factories and lays off workers, up from an initial $1.4 billion for that sweeping restructuring.

The Detroit-based company, which remains the world's No. 1 automaker by revenue but ranks No. 8 by market value, has been slashing costs and cutting capacity as it adjusts to the loss of market share to Asian rivals in its core U.S. market.

The increased charge added $300 million in costs that GM said it expected to incur once its current contract with the United Autos Workers union expires in September 2007.

Under the current union contract, idled factory workers are able to collect salary and benefits in a costly program known as the JOBS bank. GM has not disclosed the number of workers in that program, but union and analyst estimates put the total at over 7,000.

GM said it was in talks with the UAW to reduce that number through a cost-saving program of buyouts and early retirement.

GM also said it was increasing the estimate of its exposure to former subsidiary Delphi Corp. to $5.5 billion before taxes from an earlier estimate of $3.6 billion.

It said that its total exposure could be as high as $12 billion, but would probably be much lower if a three-way deal including Delphi and the UAW could be clinched.

Absent such a deal, Delphi CEO Steve Miller has said he would ask a federal bankruptcy judge to void the supplier's existing labor contracts, setting the stage for a strike that could cripple GM.

J.P. Morgan analyst Himanshu Patel said in a note last month that a work stoppage at Delphi could cause GM's U.S. operations to grind to a halt and cost it some $5 billion in cash a month.

For that reason, GM's recognition of a higher cost for Delphi could actually be read as a positive development, said Erich Merkle, of auto tracking firm IRN Inc.

"This sounds good," Merkle said. "We've felt all along that GM would have to provide some kind of early retirement or other buyouts. Obviously, they're raising cash for something."

When GM spun off Delphi in 1999 it guaranteed the pensions and benefits of the union workers.

GM said in its statement that a further revision to its estimate of Delphi-related expenses was possible before it filed its annual report, expected by the end of the month.

http://www.autonews.com/apps/pbcs.dll/arti...ct=newsletter08

Edited by Ghost Dog

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ZL-1    160

So it's mainly Delphi and GM's own restructuring costs, and not any fallout from SEC investigations. Not so bad news after all.

Thanks for posting the AutoNews article, Ghost Dog.

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bowtie_dude    0

D'oh! GM just got a low-blow on Today on NBC. When talking to "Mad Money" guy, when asked if GM's $10 bil loss should worry people he said "GM is no longer big enough to affect the economy..." and went on to say "...we should really start considering Toyota and American company."

Talk about kickin'em when they're down.

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drew770    0

We have all waited long enough for Rick to do some massive changes but with GM continuing to bleed red ink, it is time for him to go.

Rick's lack of focus to turn GM around is getting more and more apparent with every press release!

Sorry but it's time for GM to get someone that is not afraid to ruffle some feathers in GM legendary slow and hardheaded bureaucracy.

GM needs someone that can put fire into everyone!

The Life of this company depends on someone better than Rick!

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RichW5    0

Guess what? It's tax time and restructuring costs are just part of the game companies play to gain a tax advantage. I don't like it and it gives the media more to complain about, but it's part of corporate life today. GM screwed up by reporting this after their initial financial report.

I'd be more concerned with the $175 million income of Consumers Union (CR's parent) with absolutely "NO TAXES PAID". Isn't that what CU complains that the corporations do?

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I saw that on the Today show Too!!! What an ass.

Yah, Toyota is an American company. Don't think so bud. Just because there are enough suckers in this country buying their junk doesn't make them American. No way no how.

I think if Toyta wants to think they are American, have them flip the 10 Billion $ bill for this since they were the losers who caused this with their incesant brainwashing of the American public. Heck, make all these import buying morons pay for it since they were the ones who foolishly supported something other than our great company.

Just you wait, I predict this year and the next, we will see global domination from GM. People across the world are going finally wake up and realize that every non GM piece of garbage that they have parked in their driveway can easily be replaced by a superior GM product, whether it be an Opel, Holden, Pontiac or (Insert your favorite GM brand). All of those other cars should be recycled for cat food cans and Guard rails for all I care.

GM is prime and everything else is fecal matter. its about time the world realized that.

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sciguy_0504    0

Sorry but it's time for GM to get someone that is not afraid to ruffle some feathers in GM legendary slow and hardheaded bureaucracy.

GM needs someone that can put fire into everyone!

Could not have said it better, even if this extra $2 billion only relates to restructuring costs. Someone from the outside needs to be brought in.

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cmattson    0

There are two benefits to what GM is doing here (and both are commonplace in business/tax accounting):

The first benefit, as you've already stated, is that GM gets to offset these losses towards future earnings. It's been a long time since I took my accounting classes, but back when I did take them (and I'm not going to date myself here), it was something like 5 years or 7 years. What that means to the lay person is that GM can deduct a portion of this years losses onto future earnings statements, thereby lowering future taxable income. So losses this year translates into reduced taxable income for several upcoming years.

The second benefit is a bit more subtle. The basic idea is that "if you are having a horrendous quarter/year", then you accelerate everything you can find into that fiscal period and take just one gigantic hit on the bad news. It makes future quarters/years that much easier to turn a profit because the expenses have already been recognized. The public, generally, has a short memory. Posting 8.6b or 10.6b this year isn't going to matter if GM posts a profit in q1,q2,q3 next year. Of course the board and the executors will point to the "improvement" and rationalize that their work calls for bonuses of cash and stock.

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D'oh! GM just got a low-blow on Today on NBC. When talking to "Mad Money" guy, when asked if GM's $10 bil loss should worry people he said "GM is no longer big enough to affect the economy..." and went on to say "...we should really start considering Toyota and American company."

Actaully, he didn't say this.

He said that GM wasn't big enough to affect the market meaning the stock market. Different than the economy. Big difference. GM's market capitalization (basically the number of shares outstanding times it's market price - the dollar value of the company as a whole) is miniscule compared to other measures of size such as revenue. In fact, GM is 15 times smaller on a market cap basis than Toyota and 16 times smaller than America's largest company, Wal-Mart. An extra $2B loss added to already dismal results has no short-term effects on the economy (loss of jobs, wealth, productivity) in general. However, a bankrupt GM would be a tremendous blow to the economy for those reasons and perhaps more when you consider the amount of GM debt tied up in derivatives.

Edited by buyacargetacheck

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A FOOL AND OUR MONEY

Here it is folks, proof positive that things only get worse the longer "Red Ink Rick" remains at the helm. It's time for the shareholders, employees, and dealers to band together and demand the removal of this buffoon.

Rick Wagoner is of course directly responsible for this. After all, he's been at the helm for 5 years, an eternity in the business world. Who can honestly dispute this?

Worse, though, is the inept intractable board of directors. How are these people helping? Are they trying to put GM out of business?

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greg_nate    0

Lutz shouldnt have his name dragged through the mud, but Wagoner won't make it past summer of '06.

I agree - hopefully Lutz won't be branded via guilt by association. Regarding Wagoner, I can only hope he is gone by the end of this year, but I am not holding my breath.

There is one good reason to keep Wagoner aboard: Use him as the scapegoat for a UAW strike. No CEO wants to own a strike and make the tough decisions as a result. I say keep Wagoner onboard through the bankruptcy and/or strike. Let Wagoner be the fall guy and pin everything on him.

Once the company energes from bankruptcy, then get rid of him. It would be a fantastic PR stunt timed perfectly with a leaner, meaner GM if they were also able to announce new leadership.

Edited by greg_nate

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ehaase    18

The first benefit, as you've already stated, is that GM gets to offset these losses towards future earnings.  It's been a long time since I took my accounting classes, but back when I did take them (and I'm not going to date myself here), it was something like 5 years or 7 years. 

Financial accounting and tax accounting are quite different, and the increased losses reported by GM may have little or no effect on taxable income. Several days ago, the IRS commissioner proposed public disclosure of corporate tax returns, which I agree with. However, the reasons are opposite of GM's situation. Many corporations, like Enron, inflate financial income, perhaps to boost their stock value, while doing all they can to reduce taxable income.

Generally, net operating losses may be carried back 2 years and carried forward 20 years.

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FUTURE_OF_GM    26

D'oh!  GM just got a low-blow on Today on NBC.  When talking to "Mad Money" guy, when asked if GM's $10 bil loss should worry people he said "GM is no longer big enough to affect the economy..." and went on to say "...we should really start considering Toyota and American company."

Talk about kickin'em when they're down.

Looks like THAT guy received his check.... Nah, wait a mintue... The liberal media screws over GM for free these days, I forgot.

**GET USED TO THIS.... They have been trying to force GM out and ADOPT Toyota for years and with the hybrid hoopla HIDING the "only positive too" apparently truck production and Jim Press PROCLAIMING Toyota an american company. BOTH sets of arms are stretched WIDE open and a nice big hug is about to ensue in the propaganda... I mean press.

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VenSeattle    8

Wait a minute... how is GM not big enough to effect the economy when Toyota is? GM employs far more Americans, sells far more cars, and has far more dealerships in the US than Toyota.

EDIT: Didn't see that he was misquoted.

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Ghost Dog    1

The Bad news is'nt over yet.

GM also said it would delay filing its annual report with securities regulators because it had mistakenly accounted for cash flows from a mortgage subsidiary of GMAC called ResCap. It will also restate results from 2000 to 2004 due to ResCap.

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Chris_Doane    29

Looks like THAT guy received his check.... Nah, wait a mintue... The liberal media screws over GM for free these days, I forgot.

Cramer?  The guy is stinking rich (self made off the market) and now runs a hedge fund for charity.  You should pick a different target.

http://www.businessweek.com/magazine/conte...44/b3957001.htm

LTB is correct. Might wanna find out something about the guy first before you issue your company line. Watch his show for a week and you'd realize Cramer isn't a guy who just spouts off opinions without doing his homework. Not to mention the original mention of his comments in this thread were misquotes.

Edited by CD/BP

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