GM reports $2.5B loss, says federal aid essential

[BeatleBoot]

Source: The Detroit News

General Motors Corp. reported today a $2.5 billion third-quarter loss as tight credit, a stock market crisis, stalled consumer spending and a declining housing market have led to fewer vehicle sales and pushed the automaker closer to running out of money next year without additional federal aid.

<snip>

The financial results released today pinpoint the depth of GM's problems and shows how close the automaker is to running out of cash next year and also explains why executives are expected to announce additional cuts later this morning. The automaker is reportedly planning to announce factory closures, although it is likely to cut production by eliminating shifts, overtime bans or temporary plant shutdowns.

GM burned through $6.9 billion during the third quarter, leaving the automaker with $16.2 billion in cash, securities and readily-available assets. That's down from down from $21 billion at the end of the second quarter.

GM said it might fall below the minimum amount of liquidity -- $11 billion to $14 billion -- by the end of the year.



Read more: http://www.detnews.com/apps/pbcs.dll/article?AID=/20081107/AUTO01/811070429

[LittleApple81]

1. They lobbied against the CAFE standards, kept producing and pushing behemoth style cars, designed

the wrong type of engines... and who will be fired? The workers. Who will lose? the country. These bloodsuckers at the top are despicable and there should be a law where they could be prosecuted and sent to jail.

[DS1]

2. Slash all the "Chief xxx" job salaries by 90% and eliminate bonus packages

cancel stock options.

[Taverner]

3. How about Nationalizing GM - and turning out only green cars

Buy Tesla Motors and Nationalize GM - then build only green cars and sell them for cheap. Make it cheaper to buy and run an electric car than one with an ICE.

[WriteDown]

8. Tesla was a boondoggle

And they'll probably be gone soon. GM had the awesome Volt on the way, but I guess now we may never see it.

[Taverner]

11. Ahhh but they were a boondoggle based on sound technology

I say we just buy the plans

[WriteDown]

13. Not so sure about that technology...

This smells of bait-and-switch

http://www.reghardware.co.uk/2008/10/31/elon_musk_tesla_bail_out/

[Taverner]

15. The technology was based on what that rogue Engineer in Berkeley was doing

Or should I say, is doing - turning Priuses into Plug in Hybrids

[WriteDown]

16. Yep....

But Tesla is also charging over 100K per car. GM has the Volt projected to start in the low 40's.

[Taverner]

17. Thats why I say buy them both, scrap Tesla but keep the tech and patents

Then make the Ultimate EV and make it afforrable

Oh and subsidize them

[WriteDown]

19. They would have to be heavily subsidized....

And I can't imagine getting my car repaired under a government backed warranty. Looking at some of the other vehicles that the US government has created does not give me confidence either.

[Taverner]

20. What if you could buy a Prius-like car for 10K though?

Talk about stimulating the economy...

[WriteDown]

21. Seems like a dream to me....

What about having one for free? I would much rather have a Volt than a Prius, but I am old enough to realize that nothing is ever free or if it seems too good to be true then it probably is.

[Taverner]

23. Volt, Prius, some form of Green Car that is subsidized

KInd of like what Germany did with the Volkswagen, or Sweden with the Volvo.

[WriteDown]

24. You'll notice

That Volkwagen's and Volvo's are now very expensive. Also, when Germany started to create the "working man's car" they came up with the VW beetle. Talk about ugly. Love Herbie, but would never want to drive him.

[Taverner]

25. Ahhh but it was cheap at a time when very few had $$$

Like today

Let me put it this way. Every system has a time and place. Now is the time for European Style Socialism.

[WriteDown]

26. That is just ridiculous....

So Nazism had a time and place because that is what brought about the VW beetle? Didn't some historian on Star Trek theorize that Nazism was the most efficient form of society? I can't think of any European countries that are subsidizing auto-manufacturing right now.

[Taverner]

27. No - you are going so out of context I got half a mind to smack you

The VW motor corp was a great idea. We need that kind of idea now. Get all the gas guzzlers off the road, and green options on the road. The only way we can do this is a nice sweeping SOCIALIST plan.

It has NOTHING to do with Nazism

[WriteDown]

28. VW was the result of Nazism....

Not socialism. Forcing people to buy cars is not the answer. Large tax breaks for corporation who make fuel efficient cars and large tax breaks for the buyers of these cars is the answer.

[Taverner]

29. No, nationalizing GM who can't manage itself is the answer

VW came out of Nazism, but it was a socialist concept. And no one was forced to buy a car. They were enabled.

Same with Sweden

[WriteDown]

30. You can nationalize GM...

But then you have to ban or put severe tariffs on all other manufacturers. You are basically locked into a car that no one may want. The Soviet Union tried that with cars like the Lada and the Oka. Didn't work out too well. Although these are somewhat collectible today.

[Taverner]

31. No we just offer an option like the USPS

You don't HAVE to send a letter through the post office

You can go FedEx or UPS

But USPS offers a subsidized service for the masses

Why not a car for the masses?

[WriteDown]

32. You can get a Chevy Aveo....

For under 12K. Is that not a car for the masses? And your analogy is a good one. Anyone who sends a lot of mail or packages knows that fedex and UPS are extremely more reliable than the USPS.

[Taverner]

33. Well, yeah

But we won't have to bail GM out if we OWN THEM

We can also enforce workers rights

and push green vehicles, because it would be OUR MOTOR COMPANY

Europe does this with a lot of its businesses and does just fine

We're gun shy of any hint of socialism, so we never do it, even though it works

[WriteDown]

34. You heart is in the right place....

but your logic is off....

If we bought them it would be an enormous bailout. Factories would have to be retooled, plans would have to be reviewed, etc. It would cost trillions and would go on for decade.

GM has some of the best unions around. The problem is that Toyota and Honda don't have that burden.

The Volt is the #1 priority at GM right now and they are the only company coming out with 100% electric. Seems like they are pushing it just fine. Also, couldn't we just regulate this?

Europe is having its own problems right now. Also, I am not sure they are subsidizing any auto-manufacturers at this time, nor have I heard of any European manufacturers promoting Green tech.

[tclambert]

22. There are hundreds of little engineering shops in Southeat Michigan

who basically sell innovation to the big car companies, including Japanese and German ones. They've got loads of plans, and are working on more. One broad approach they are pursuing is how to convert existing models to hybrids, either parallel or serial hybrids. (Serial is better. The Volt will be a serial hybrid. Prius is a parallel.) These companies are growing and are actively recruiting the best and brightest young engineers. Even though they are small compared to GM or Ford, they are big compared to Tesla.

Tesla is likely to follow the path of DeLorean and Bricklin. A start-up auto company is a tough, tough business. A basic car is just such a complicated machine. The big companies have been refining them for a long time. Hard to match that institutional memory.

[Purveyor]

4. Unfortunately for the workers, retirees and suppliers, the only viable option is bankruptcy.

Then it won't be 2 weeks before Ford and/or Chrysler follows suit.

[galileoreloaded]

5. Correct.

PBGC will ultimately fail under a gm>chrysler>ford BK, and millions will lose everything, not just the millions out of work.

Here goes US Treasuries on a moon shot. I fear Obama will not have much to work with, but lets hope he is as smart as we hope he is.

This is so sad, and there is not much to do but sit and watch.

[iceman66]

6. They should be pushing for national health care

GM going broke is largely due to health care obligations to retirees and family members. A national single-payer system would do wonders for their balance sheet!

[WriteDown]

9. You nailed it...

Health care and pensions killed them. They seemed to be turning the corner though.

[tclambert]

14. And Exxon Mobil's profits

All the money the oil companies made came at a severe cost to other industries.

[ElboRuum]

7. It's too bad, really.

I thought they were starting to get their shit together by making cars people want.

[WriteDown]

10. The Volt

is a good example of that.

[ElboRuum]

12. Yes, that one looks pretty exciting...

But even their standard cars are showing a proper direction in promise. GM finally wised up and turned the Saturn brand "European" by essentially sharing designs with their Opel and Vauxhall subsidiaries. The new Camaro is pretty spiffy looking, the Corvettes are definitely improving year by year (if you haven't guessed it yet, I'm into performance cars, so when the Tesla becomes a bit more affordable, I might be interested). The Saturn Sky Redline and Pontiac Solstice GXP are certainly putting a little extra in both the power and style columns and bringing back the roadster (not a bad thing IMO). The Malibu was going to be GM's big savior, and it was well on its way, but when they did a massive layoff at the plant that assembles them, it may have already been too late.

[tclambert]

18. It takes time to turn an aircraft carrier.

It takes years for car companies to respond to an unforeseen change in the market. GM and Ford did a bad job of predicting future market conditions. You'd think one person in authority would have said, "Hey, what if gas prices go way up?"

They are close, though, to turning this crisis around. Another year or two, and we will be praising their comeback. (That's a prediction.)

Inside GM, the Volt has priority over any other project. We will see that car. (That's another prediction.)

The worst scenario is a foreign company (Toyota) buys Ford or GM on the cheap while they're struggling. It is important to the economy and to national security that America have its own car companies.

[CRF450]

35. The production of the Camaro did save a couple thousand jobs...

Even though it will be built in Canada, the plant its being built in does have a good reputation for good quality at the least.

[RedCloud]

36. Appoint Nader in charge of energy...

That way those bastards of planned obsolescence will get their comeuppance.

[Hannah Bell]

37. There is something seriously wrong with the US auto situation.

The big 3 have been pleading poverty for 30 years, & getting all sorts of bennies from the gov, not to mention miscellaneous bailouts & tax breaks. They've used the $$ to move overseas (started moving to China in the 80's), outsource jobs & screw their employees. They've been making big profits overseas for years, but somehow they just can't manage it in the US.

According to this, in '05 they had 460,000 retirees & 317,000 employees (world-wide). 777,000 employees + retirees.

http://www.accessmylibrary.com/coms2/summary_0286-96931...


According to this, they took in 181 billion in revenue in 2007.

http://en.wikipedia.org/wiki/General_Motors

So let's assume half of that revenue goes to cost of materials, overhead, etc. That leaves 90.5 billion. That still leaves about $129,000 per employee/retiree.

That would allow you to pay every employee/retiree 60K & still have 45 billion in profit.


I seriously think these businesses are being skimmed via fancy accounting, & the US auto slump is just one more screw-the-workers scam.

[Trillo]

39. It's the so-called "fresh" smell of corporate welfare

General Motors paid no taxes at all in three of the last five years, despite $12.5 billion in reported U.S. profits. GM’s tax rate for the past three years was negative 1.3 percent. Its corporate tax welfare totaled $3.6 billion over the past five years.

http://www.ctj.org/html/corp0402.htm

That excerpt was written in 2002, according to the date on the page, so GM needing taxpayer money is nothing new.

I can't help but wonder what a few billion would instead do for the homeless.

edit: added URL

[katty]

38. GM will get their bailout, next on the runway, begging: the airlines

how about spreading the wealth to the people that have lost everything?!

[RedEarth]

40. Running on fumes: GM could soon run out of cash

Source: (AP)

DETROIT (AP) — The American auto industry is running on fumes.

General Motors, the nation's largest automaker, warned Friday that it may run out of money by the end of the year after piling up billions in third-quarter losses and burning through cash at an alarming rate. Ford sustained heavy losses, too.

The situation is so severe, GM has suspended talks to acquire Chrysler and is appealing to the government for help as the slumping economy drags cars sales to their lowest level in a quarter century.

.......

IHS Global Insight analyst George Magliano said the cash problems reported by GM and Ford were worse than experts had thought. And that raised the risk of bankruptcy.

"It's close," he said about the possibility of one of the U.S. automakers filing for Chapter 11 protection. "Up until now, we knew the cash numbers were tough, but we didn't know how bad."



Read more: http://ap.google.com/article/ALeqM5jlB5Dk1ZUPlQnvuvPOlaj7aupJoAD94AEDH00

[Name removed]

41. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Hawkeye-X]

42. GM needs to dump all SUV's and start concentrating on fuel efficent cars..

and I mean something with over 50 MPG, twice the CAFE standards, before I even think about buying a GM.

My parents own both GM (Cadillac) cars (one SUV that Dad's returning in March) - and they SUCK on gas.

Hawkeye-X

[high density]

43. Every business and person is running low on cash these days

Deal with it like the rest of us.

[ben_meyers]

44. But the rest of us didn't donate millions to Obama like

the UAW and the rest of the unions, they are expecting a return on that investment, and they'll get it.