GM turns loss into first profit since '04 (It's smoke and mirrors, folks!)

[Bozita]

That's today's front page headline in the Detroit Free Press.

For proper analysis, both articles need to be considered.

http://freep.com/apps/pbcs.dll/article?AID=2006605090338

GM turns loss into first profit since '04

New figure is $445 million; it's mainly in the accounting

BY MICHAEL ELLIS
FREE PRESS BUSINESS WRITER

May 9, 2006


Armed with the advice of federal regulators, General Motors Corp. said it earned $445 million during the first three months of the year.

Less than three weeks after GM said it lost $323 million in the first quarter, the automaker revised its results Monday evening to a significant profit, breaking a string of five consecutive quarters of financial losses and feeding hope that GM's turnaround plan is working.

The switch is because of a change in how GM accounts for $3 billion in charges it will take to pay for a new health care fund for hourly retirees, part of the concessions agreed to with the UAW last year. Those costs now will be spread over seven years.

"To some extent, a lot of it is accounting," said Joseph Phillippi, a former Wall Street analyst and now the principal of AutoTrends Consulting in Short Hills, N.J. But he added: "Things are clearly getting better."

more...


In the same edition of the Freep, this article is found:

http://freep.com/apps/pbcs.dll/article?AID=/20060509/BUSINESS01/605090397

Rough patch for pickup sales may be a danger sign

BY SARAH A. WEBSTER
FREE PRESS BUSINESS WRITER

May 9, 2006

Sales of profitable, full-size pickups -- a crucial source of profits for Detroit automakers -- dropped by nearly 12,000, or 5.9%, last month, as gas prices rose, automakers offered fewer discounts and a few models started getting stale.

Despite growing competition, local automakers continue to dominate the full-size pickup market. But the declining sales are a noteworthy development for the auto-centric Michigan economy and consumers nationwide.

While the sales decline is leading to incentives averaging about $3,600 on full-size pickups, falling sales combined with big rebates are a red flag that there might be lower profits for local automakers in the future -- revised first-quarter earnings at General Motors Corp. notwithstanding.

The April decline in pickup sales was more than the 3.7% drop-off in the overall auto market, and it comes at an unfortunate time. With sales of profitable truck-based SUVs taking a dive this year, the 2.5 million-strong market for full-size pickups is becoming more crucial than ever.

more...

[zann725]

1. By chance, did they ALSO lower (or freeze) employee wages,or cut pensions.

benefits?

Sales angle...especially in light of gas crisis, I just don't "buy."

[FreakinDJ]

2. EXACTLY

It was all about the losses until they succesfully trashed the working stiff's pension.

This goes to show the ability these corps. can manipulate our Federal courts in order to rob the working class citizenry of their hard earned pensions. They petitioned Federal courts to destroy 10s of 1000s of pensions and NOONE found these accounting descripencies

[Psephos]

4. They didn't trash the working stiff's pension

But if GM does go bankrupt a lot of people are going to be shivering in the cold.

I'm from a GM family. What's with this spread of disinformation? It doesn't help anyone.

Peace.

[Blaze Diem]

3. Hmmm...Isn't that what ENRON said????

Amazing how these Corporations can turn loss into profit?