"New GM" Reports $1.2 Billion Loss

[rrocket]

DETROIT — General Motors on Monday released its first post-bankruptcy financial results, for the period from July 10 through September 30, posting what it referred to as a "managerial net loss" of $1.2 billion. GM said it also expected to continue spending more money than it takes in during the fourth quarter and said that its existing cash pile will "decline materially" by the end of the year.

Despite the dour outlook, GM said it plans to begin repaying government loans in the U.S. and Canada in December, ahead of their scheduled maturity date in 2015.

GM reported what it called "preliminary non-GAAP managerial results" — meaning the numbers don't conform to the industry standard of generally accepted accounting principles — for the restructured company's first 83 days of operation after it emerged from a brief government-sponsored bankruptcy, supported by $50 billion in government loans.

In a statement, GM president and CEO Fritz Henderson said, "Today's results provide evidence of the solid foundation we're building for the new GM."

The numbers suggest otherwise.

GM's total revenue in the third quarter was $28.0 billion, including $26.4 billion in the post-bankruptcy period. That compares with $37.9 billion in the third quarter of 2008 and $43.7 billion in the third quarter of 2007.

While GM's international operations earned a pretax profit of $238 million, GM North America posted a pretax loss of $651 million during the period, which included a temporary bump in sales from the government-sponsored Cash for Clunkers program.

GM's U.S. market share this year has plunged to 19.5 percent, from 24 percent last December. GM said its global market share has "stabilized" at just under 12 percent.

At the end of the period, GM said it held $42.6 billion in cash — essentially the balance remaining on its government handouts — including money set aside in an escrow fund to repay the U.S. Treasury and Export Development Canada. GM said it plans to accelerate repayment of the loans, beginning in December.

Despite shedding tens of billions of dollars in debt during its bankruptcy this summer, GM remains saddled with $17 billion in debt, mostly owed to the government, as well as more than $12 billion in notes and preferred stock held by the UAW and CAW unions.

GM said it expects to have "negative cash flows" in the fourth quarter, spending more than it takes in. As a result, the company's "global cash balances at the end of 2009 are expected to be materially lower than third-quarter levels of $42.6 billion."

[Turbo Bob]

as well as more than $12 billion in notes and preferred stock held by the UAW and CAW unions.

Next time they ask for a pay rise, it'll be like that line from Trading Places... "you're only stealing from yourself." 

[ovr50]

Numbers not compliant with GAAP are meaningless, smoke and mirrors. 

If they want to be taken seriously, they need to use GAAP. Probably numbers are too poor that way. But, those are the factual numbers.

 

[Turbo Bob]

At least they are getting "creative"! 

[Leviathan]

 

A feller over at gm-volt.com posted this slide that is interesting:

[rrocket]

A feller over at gm-volt.com posted this slide that is interesting:

Interesting?  More like distressing.  They have ATP several thousand more than the outgoing model, plus ATP that are higher than the segment average...and they are still bleeding money?

Interesting for sure...but for all the wrong reasons.  I wonder exactly what is sucking all this money from GM?

[articsteve]

By this next year GM must be marginally in the black or it will be Chapter 7.

They are making a complete mess out of the OPEL situation:

Earlier today, GM reaffirmed it wants state aid to help overhaul Opel after a newspaper quoted GM's chairman Ed Whitacre as saying the U.S. carmaker will not ask German taxpayers for help.

Attending an event at the Texas Lutheran University earlier this week, Whitacre told a German journalist that the U.S. carmaker was financially strong enough to stem the costs itself.

No apology from Whitacre

Whitacre also distanced himself from comments by GM CEO Fritz Henderson, who apologized to Germany for the way the Opel sale issue was handled.

"I don't agree whatsoever with Henderson in that regard. The decision-making process may have been confusing for some, but we have nothing to be apologetic for," Whitacre said.

[Leviathan]

Interesting for sure...but for all the wrong reasons.  I wonder exactly what is sucking all this money from GM?

A post a while back had said something about the large incentives on trucks to clear out aging 2009s in inventory. That can't help.

[articsteve]

A post a while back had said something about the large incentives on trucks to clear out aging 2009s in inventory. That can't help

The 2009 Malibu has had 0%60 on it in the US since it came out.  When the 2009 GM 1/2 tons first came on the market in Canada they all had 8K off the top.  Cottage neighbour of mine shows up one weekend in June with a 2009 3/4 ton GMC loaded crew cab/leather/Allison diesel/sun roof/every option.  Before he even got taking trade and dealer discounts GM Canada had 12K cash discount on this vehicle. 

The 60 day "return the vehicle if your not happy" promo GM has been running in the US since September and costs $500. per vehicle.  That is what they pay customers NOT to return the vehicle.

So when ppl start talking that GM sales are up it's only because they are giving them away.  Take 0%60 off the Malibu and sales will die.  Worse, customers now expect a huge incentive on any GM or they will go elsewhere.  GM is married to these incentives and it's only because of the bailout funds that they have been able to offer them.  It is not hard to sell cars at 0%60 or 1/2 tons with 8K off.

Mark my words    By Sept 2010, GM will be in such desperate shape that the final "Hail Mary" will be FREE maintenance for 4 years/80 km excluding tires.

[rrocket]

Interesting for sure...but for all the wrong reasons.  I wonder exactly what is sucking all this money from GM?

A post a while back had said something about the large incentives on trucks to clear out aging 2009s in inventory. That can't help.

Agreed.  But all of the blame can't be just on the trucks.  And we're talking about new models here.  Are they already being discounted?

[articsteve]

Agreed.  But all of the blame can't be just on the trucks.  And we're talking about new models here.  Are they already being discounted?

If you watch NFL football, GM's pitchman, Howie Long (also a FOX NFL anchor) has being pitching the Malibu 0%/60 since September about 10 times each game.  He also pitches the Traverse and something else all with discounts.

GM will launch sale across all brands this week
Jamie LaReau
Automotive News
November 16, 2009 - 11:02 am ET
UPDATED: 11/16/09 3:17 p.m. ET


DETROIT -- General Motors Co. will launch a big incentive program for its four surviving U.S. brands this week in a bid to flush out excess 2009 inventory that has been keeping GM's per-vehicle incentive spend the highest in the industry.
 

[Leviathan]

But all of the blame can't be just on the trucks.

Delphi bailout was probably part of it too. Found a PDF of the presentation
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjA3OTF8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

[articsteve]

GMs problems went a lot deeper than the public realized.  They were the only car company that owned their own major supplier.  When they spun Delphi off it was bankrupt and it never really got back on it's feet so GM has been forced to divert resources into that continuously.  I also think American Axle was in the same position and GM has had to support that as well.  There are probably more.

If the US Banking system, and the US housing market had not collapsed at the exact same time GM and Chrysler hit the wall, I think Bush and his ppl would have let them go.

[toolatecrew]

If they didn't use GAPP it is  becuase the picture it painted would be even more bleak. The worst part is that they are attampting to snow people even more. To explain as simply as possible

Despite the dour outlook, GM said it plans to begin repaying government loans in the U.S. and Canada in December, ahead of their scheduled maturity date in 2015.

Is nothing but a shell game a scam whatever you want to call it to hide the fact that we will never get even a fraction of the money loaned back.

They were loaned/given a huge chunk of money. Now they are losing huge chunks of $ buring through those reserves. What they propose to do is to take some of that money they were loaned to PAY BACK THE LOANS!

Its akin to you going to your parent and saying I'm broke please lend me 50 K I promise to start paying it back next year. You immediatley spend 25K on geetting rid of your ex girlfriend. Another 5 K on booze and crack.  So you have 20 K left to live on. You are buring through 2K a month. But next month you take 1K and give it to your parents and say SEE "I'm paying it you back just like I said". Mind you in 6 months or so you will have spent the remaining $ and be broke again. So they in effect lent you 49 K that they will never see and you are right back where you started, broke.

[safristi]

..a new study has shown the "baileouts" are worth $10,000 grand per Car(GM & CHRYSLER)...........from the taxpayers(YUP including Canadians in that )...so better buy ONE U already have paid for half to a third of ONE already.....

[Turbo Bob]

The 60 day "return the vehicle if your not happy" promo GM has been running in the US since September and costs $500. per vehicle.  That is what they pay customers NOT to return the vehicle.

That is funny, so if I go and buy a truck, I drive back to the dealer after 50 days and sit at the sales guy's desk and say, "so what will you give me in cash right now to NOT bring this truck back...?"

Man you could hold them to ransom!



C'mon, help old Gill out here!

[articsteve]

There is also another little detail that Mr. Lutz fails to disclose when he goes off on a rant about how successful this 60 day buy back is;  TAX LOSS.

Lets take Kentucky for an example.  When you buy a new vehicle in KY the owner pays the state a property tax on the value annually in addition to the 6% sales tax.  The cost is determined by the worth of the car.  A 35K USD vehicle in KY costs approx. $500. for the first year depending on what county it's registered in.  Then $400 for the next year and so on down a sliding scale.  This fee is non returnable even if you hold the car for only one day.  Sounds ridiculously socialist and straight out of the old Soviet Union doesn't it? (Perhaps someone could point this out to Sen Mitch McConnell when he slams Obama as a socialist  )

Consequently, if you as a KY resident decide to return your GM treasure under the 60 buy back you kiss this "property tax" fee good bye.

[No H2O]

I don't need a 60-day satisfaction guarrantee from them; I need a car that I want to buy from them.

Will management thinking at GM ever change?

[articsteve]

A 5 year bumper to bumper warranty would have been the best option as the GM "powertrain" warranty is riddled with exclusions.

[DockMan]

By this next year GM must be marginally in the black or it will be Chapter 7.

I disagree. I don't think that lawmakers have the "stones" politically to let GM fail now after pumping in so many billions. My guess is that GM will languish and just be "on the dole" forever more.

*EDIT*
Maybe McCain has the stones. http://www.canadiandriver.com/forum/index.php/topic,64731.0.html

Good luck getting congress to keep their hands from stuffing money in the bottomless cookie jar though.