GM's Bottom Line Continues To Stall

Automaker Posts $15.5 Billion 2nd-Quarter Loss Amid Labor Unrest And Massive Restructuring

(AP)  General Motors Corp. said Friday its losses widened to $15.5 billion in the second quarter as North American sales plummeted and the company faced expenses due to labor unrest and its massive restructuring plan.

The loss of $27.33 per share is the third-worst quarterly loss in the automaker's history. In the same period a year earlier, GM recorded a net profit of $891 million, or $1.56 per share.

Revenue for the April-June period was $38.2 billion, down $8.5 billion from a year earlier.

The company said its loss included $9.1 billion in one-time charges, including $3.3 billion for the buyouts of 19,000 U.S. hourly workers who left at the end of June and $2.8 billion in liabilities related to Delphi Corp., its former parts division.

It also included $1.3 billion worth of write-offs because of a decline in the value of GMAC Financial Services' portfolio of trucks and sport utility vehicles, which have seen sales have plummet due to high gas prices.

GM also took a $197 million charge related to the settlement of a nearly three-month strike at supplier American Axle and Manufacturing Holdings Inc., which shut down more than 30 GM plants. GM agreed to help American Axle fund worker buyouts as part of the settlement.

Without the one-time charges, GM lost $6.3 billion, or $11.21 per share. Twelve analysts surveyed by Thomson Financial predicted a $2.62 per share loss on revenue of $44.57 billion.

The $15.5 billion loss is less than half GM's record $38.6 billion loss in the third quarter of last year. That loss was due to a write-down on the taxable value of assets. The second-worst loss was $21 billion in the first quarter of 1992.

GM said its revenues outside North America rose by $1.7 billion to $20.8 billion in the quarter, but those gains were more than offset by losses in North America, where high gas prices and the weak economy have wreaked havoc on the auto industry.

On July 15, GM announced plans to lay off thousands of hourly and salaried workers, speed the closure of truck and SUV plants, suspend its dividend and raise cash through borrowing and the sale of assets.

"As our recent product, capacity and liquidity actions clearly demonstrate, we are reacting rapidly to the challenges facing the U.S. economy and auto market, and we continue to take the aggressive steps necessary to transform our U.S. operations," GM Chairman and Chief Executive Rick Wagoner said in a statement.

[tachoma-2009]

I owned a 1994 saturn in 1998. i took it to the dealership because the lights were giving me trouble. they told me the whole electrical system needed to be rewired at the price tag of 1000 dollars. then i took the same car to electrican specialist who couldn''t find 1000 dollars worth of damage to the electrial system. i insist on them giving me an invoice. Saturn refused. so i told them i wouldn''t pay for the diagnostic. after a few choices words i told them i would not buy there product ever again for it was nothing but a rip off for a company to purposely make a bad product with the intent to make money off repairs and they would one day be out of business. he laughed and said the US gov would go under before GM. That''s why i like Honda my accord is working perfectly.

[oneworldusa]

I did GM a favor and bought a Malibu in 2001. Nice car, except it was always in the shop. The opportunity costs in my case of missing work all the time and arranging rides and repair expenditures were far less than the extra bit it might cost to buy a more reliable brand. So, I''m back in a Sentra. Great mileage. No repairs, just regular maintenance.

[oneworldusa]

But what about all the Buicks they''re selling in China? Oh, that''s a ''different'' arm of GM. The one that''s profitable right now. They just want us to feel bad for them, poor souls, underperforming and overpricing.

Price your product right and it will move. Quit trying to Cheney the customer at all times and especially when times are good and maybe your reputation will improve and Americans will support you more in lean times.

GET A CLUE, GM FLUFF!!!

[pollroller1]

sincityq you have a good idea about selling them at Wal-Mart. The problem comes when something needs to be fixed. You need a strong dealer network to do the warranty repairs.

[dls3221]

Both GM and the UAW bear the respnsibility of this predicament: "never buy an American car made on a Monday or Friday" being a well known, undisputed 80''s commentary; and our "Ive League" brilliant auto executives totally comatose to the market shifts.

[pengel10]

Let''s set the record straight on the notion that GM cars are junk. My very first new car was 1988 Pontiac Sunbird. I absolutely loved it! There were some minor issues with the clearcoat paint job which the dealer quickly fixed. I kept it for many happy trouble-free years until, sadly, I hit a patch of black ice and rolled it over, totalling it. But in it''s last act of devotion, it and my seatbelt let me walk away without a scratch.
My next car was a 1994 Chevy Beretta, which I also fell in love with. Again, many happy trouble-free years of service. I wound up trading it in for a 1999 Pontiac Grand Am when I got the itch for new wheels. I kept the Grand Am for over nine happy years until yesterday, when I took delivery of my fabulous 2008 Chevy Malibu. Folks, this car is awesome!
Before you bash GM, please take a moment to visit a GM showroom and test drive a car that appeals to you. GM''s quality, fit and finish compares very favorably with any foreign cars on the market. And, no, I am not a GM employee....

[obama441]

NEW YORK (CNNMoney.com) -- The nation''s top automakers reported sharp drops in July sales that were much worse than expected, as high gas prices and a weak economy continue to bite the battered auto industry....don''t hold on to your stocks hold on to your socks..

[pollroller1]

pollroller1 ,,,i just my part also bought a showroom 2008 malibu loveeeeeeeeeeeeeeeeeeeeee it

Posted by sentry88 at 01:25 PM : Aug 01, 2008
Good deal. I hope you enjoy many happy and trouble free miles.

[lochlan-2009]

Anyone here wonder why the auto companies haven''t sued the government and oil companies for fuel prices?
They just take it on the chin, is what you people are thinking some of the greediest capitalists in the country are doing.

Hmmm, interesting.

[hypnotoad72]

And yet we''re exporting more oil.

http://www.forbes.com/reuters/feeds/reuters/2008/07/03/2008-07-03T184028Z_01_N02435397_RTRIDST_0_USA-OIL-EXPORTS-ANALYSIS.html

(assuming forbes'' article is correct...)

[sentry88]

obeylaw,,,,,Hemis are not made by GM pay more attention to the commercial

[ddaryl1]

Lets not bring unions into this debate. The workers have EVERY SINGLE RIGHT to a solid portion of the revenues

The blame here is with leadership and only leadership... they didn''t do anything to preapre for the inevitable but instead stayed the ocurse for easy profits that made sure the CEO''s VP''s and other uppity ups saw those huge bonuses.

Serioulsy why drag donw you bottom line with expensive R&D when you can just keep selling the same old uninspired *** and then mark up the prices way past their fair value.

I work for a company, and I belong to a union. The last 2 years the company has reported RECOR PROFITS. The 4+ years before that the company was in a down turn and forced take aways. W eput our tail between our legs and accepted this as a reality. BUT TODAY the company is in a ressurgence, and profits are at an all time high..... AND GUESS WHAT... The company is still touting more take awyas less beenfits, and actually trying to tell the employees that the budget is tight.

DOn''t blame unions.. place th eblame where it belomngs. Corporate greed and Wall Street.

it is time for laws to be put in place that force corporation to spend a portion of their total revenue on the workers. We''ve seen government socialism in action with all of these bail outs, lets be fair and assure that working Ameircans are get they''re fair share fo the monies. Becaus eif we don''t work the uppity ups won''t be seeing big time bonuses, and Wall Street will lose billions.

[sentry88]

pollroller1 ,,,i just my part also bought a showroom 2008 malibu loveeeeeeeeeeeeeeeeeeeeee it

[sentry88]

I dont remember meeting anyone named Toyota or Nissan lol

[sentry88]

downtowner97 ,, eVER HEAR THE SAYING,,,DANCE WITH THE ONE THAT BRUNG YOU,,,,,AND DID YOU KNOW THAT JAPAN HAS A QOUTA ON AMERICAN CARS THAT CAN BE IMPORTED,,, THINKKKKKKKKKKKKKKK REAL HARDDDDDDDDDDDDDD NOW AND MAYBE THAT LITTLE PEA SIZED BRAIN OF YOURS SHOULD RELIZE THAT WE NEED TO PUT A QOUTA ON IMPORTS, WHAT DO YOU SAY SPORT????????????

[downtowner97]

%u201CThe real truth of the matter is that a financial element in the large centers has owned the government since the days of Andrew Jackson.%u201D

- Franklin D Roosevelt, US President 1933

How do you fail miserably and still get to keep getting rich? Skip the IRS and give money directly to your federal government.

[downtowner97]

If you are two months late on your car payment to GM, they come in the night and take your car back. They lose tens of billions of dollars a year, and their debt is socialized by the government that keeps bailing them out.

Toyota is the top car company in America. Toyotas are built in America. The people who build the Toyotas are Americans. People think Toyota is Japanese, and Chevrolet is American. When was the last time you met someone in your home town with the name Chevrolet?

Pull the friggin plug!!!

[haoli25]

LIKE A ROCK!!! Their sales are fallin''. LIKE A ROCK!!


lol

[primilioneah]

Here is my advice to you GM. Do away with Chevy cars but retain the commercial trucks and replace them with Buick models, do away with or sale Saturn, Pontiac, and Saab. Write me a check after 4 glorious years

[marshall_nee]

The Honda Fit is a neat little car. I don''''t understand why GM can''''t build a car like that.

Posted by pollroller1 at 08:52 AM : Aug 01, 2008

They do...it''s called the Opel Meriva and they only sell it in Europe.