GM raises 2005 loss by $2 billion (to $10.6 Billion)

[UpInArms]

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-03-17T022757Z_01_N16147191_RTRIDST_0_AUTOS-GM-UPDATE-2.XML

DETROIT, March 16 (Reuters) - General Motors Corp.<GM.N> revised its reported loss for 2005 by a further $2 billion on Thursday, citing charges related to factory job losses, its finance arm GMAC. and the bankruptcy of its 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.

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

<snip>

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.

<snip>

Absent such a deal, Delphi Chief Executive 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.

...more...

[Redstone]

1. How about making cars worth buying? Ever though of that?

Redstone

[bbinacan]

4. Their cars are crap

and if they go under, I won't shed a tear.

[Redstone]

5. The only GM cars I ever owned were a '53 and a '55 Chevy.

And my dream is a 1958 Impala convertible (348, trips, 4-speed manual, continental spare tire kit, and of course, dual antennas)...but other than that, I got NO interest in GM.

Redstone

[bbinacan]

7. Cool cars.

What a shame they can't get it together.

[JCMach1]

11. Having known many hard-working UAW people

that statement is very callous.

They did make good cars... some very good ones.


However, bad management and marketing decisions have left them flat-footed in a sprint.

[bbinacan]

12. Keyword is "Did" n/t

[soldier101]

2. How do they stay in business?

I really have problems seeing that if a company loses $2B, how can they stay in business?

From, my limited view, it looks like they should be filing for bankruptcy.

[CHIMO]

3. BNS in group to buy GMAC: report

BNS in group to buy GMAC: report
Last Updated Wed, 15 Mar 2006 17:50:46 EST
CBC News

A Canadian bank is part of a group that has made a multibillion-dollar offer to buy General Motors' financing arm, the Wall Street Journal reported Wednesday.

The paper named Bank of Nova Scotia as one member of the group, which had made a bid of up to $13 billion US for General Motors Acceptance Corp.

http://www.cbc.ca/story/business/national/2006/03/15/gm-scotia060315.html

A trillion here a trillion there, well pretty soon were talking about some money. Wonder who gets the benifits of this sale?

[NickB79]

6. Wait for $3-$4/gallon gas this summer to see them go under

I was at the Minnesota Auto Show this past weekend, and well over half (maybe three fourths?) of the US-made vehicles there were SUV's and cross-overs (they get a whopping 5 mpg more on the highway than SUV's). They were promoting the hell out of flex-fuel vehicles that burn E85 from corn, but guess what? Almost all their flex-fuel vehicles were SUV's! And E85 is already $2.29/gallon here in MN, so it's only 20 cents cheaper than regular gasoline.

In contrast, Kia, Hyundai, Toyota, Honda, Nissan, Scion and Volkswagon were all sporting compact cars that get 30-50 mpg with regular unleaded fuel (my personal favorite was the Nissan Versa, followed closely by the Scion xA that I already drive :-)).

I don't know if GM and Ford will be able to withstand another year of high gas prices without being forced to declare bankrupcy.

[Sadie5]

8. More GM hype

QUOTE<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.>


Another planted story to get the union to settle with them on lower wages while the CEOs collect those fabulous bonuses. Delphi announced that a May 30th deadline for talks with the union. But the union came back and said that that was a Delphi deadline. If they tries to wiggle out of paying decent wages then they would strike all GM plants at once. The union is getting a bit stronger.

[stevekatz]

15. So strong that

No one will have a job anymore,

But by reading this thread, I think alot of people here will be happy about that.

[NickB79]

18. No one's happy about the GM employees losing their jobs

But unfortunately they work for a company that has no foresight and inkling of what Americans want to buy anymore. I feel sorry for the assembly plant workers; I have no sympathy for the CEO's and engineers that brought us the Chevy Tahoe or the new Jeep Commander.

[depakid]

21. Management dug its own grave

and will now try to blame it on labor (who will end up taking the fall and bearing the hardship).

[sleipnir]

9. Buh...Bye...Thanks for playing...

That's the end of GM.

This should be a lesson to all of how to mismanage a company and screw over all your workers in the process.

I can only imagine the wasteland of unemployment that will be spurred by this revelation and the eventual closing of GM.

[tabasco]

10. Bye Bye Pensions !

But fear not! Senior executives will be well taken care of

[Voltaire99]

13. "Setting the stage for a strike that could cripple GM"?!

How do you cripple a cripple?

GM is doomed; Ford may be as well. Soon, perhaps quite soon, we shall need a New Deal-style jobs program again in America. That will require boldness and insight from our political leaders, as well as a turning from the corporate politics to the populism that alone will be able to save us. Yet almost nowhere can such qualities be found today in our political class.

We had better discover them somewhere.

[Jose Diablo]

14. Nope

"turning from the corporate politics to the populism".

I don't think this will happen. Populism will be labeled 'socialism' or 'communistic' and the Patriot act Act will be trotted-out to suppress dissent and any union activity.

The police state will kick-in to keep the Straussian economic system in place, just like it happened in Chili.

Nor will the Republicans or the Democrats in Washington do anything whatsoever about the fascists in the corporations or the beltway. 9/11 gave unlimited power to suppress peoples rights. With politicians, just look at the meaning of the unlaying word 'politics' and you will see it's all about compromise. They will compromise, just like always. That's what they do. Don't look to DC for salvation.

Edit to add: The union leaders will be replaced (or already have been replaced) with more 'flexible' leaders willing to compromise their members interest's, to get along in a bad situation. It's just like the DLC mindset, it's better to compromise than fight it out. You can see the principle in operation right here.

As for GM's fate, after busting the union and stealing the workers pension, they will close some plants move the equipment and reopen, with a much more 'flexible' work force and a lower cost to compete with workers overseas. Yes they will be more competitive and much much more profitable.

As for the workers fate, they will be happier with less. "Less is More" you know. The race to the bottom will continue until most people will be living in a subsistance mode, sort of like those tin roof communitees you can see when you fly into third world countries.

It's the weathy neocon solution to the ecological crisis caused by us 'eaters'. That's what we are to them you know, 'eaters'.

[BlueInPhilly]

16. I work for a GM subsidiary

Please be more sensitive about your comments. We are good, honest workers here. And while I, personally, don't drive a GM car, a lot of people depend on the company for a living. We are as livid about this error as you are.

[corporate_mike]

17. We feel your pain

[Jose Diablo]

19. Why would you say that GM choosing to build what was chosen

was an error.

I would suggest looking at United Airlines and their recent experiences with bankruptcy as a way to raid the workers pensions using the Federal bankruptcy judge as the mechanism. As for GM, the top management, for them to purposely plan to put the company in a financial crisis, with the object being to cut the workers pay and pensions, along with raiding the existing pension is far from being beyond the pale.

As for myself being "more sensitive", you have no idea about me. I once worked for Generous Motors in the late 60's in Pontiac Michigan, so I also know something about the company and the type of men that occupy that building down on Grand River.

Besides, I see nothing in my post that disparages the GM workers. If you are taking umbrage at hearing the management's plans for the workers, then keep your head in the sand, just like American workers have been asleep since Raygun got in. Or if that future is not one that you can live with, then I would suggest you get very POed, not at me, but at those that would steal your future.

[Voltaire99]

23. No way, Jose?

In Chili, eh? This is the first I've heard of Strauss' culinary life! ;-)

Yes, you're right, no one should look to Washington for salvation. I certainly do not. As my post said, we need to look beyond our present political class. They're useless.

But no, the police state will not be a bar to emergency socialism, the only remedy at hand when capitalism habitually fails. The police state may repress actual socialists, true, but as usual, the capitalists in charge will call their ad hoc socialism something else, apply it, and go on preaching about the market, etc. Psychologically, it will be very tricky this time round, given the spiritual (and literal) poverty wrought by Reaganism; but never underestimate the flexibility of the unprincipled. Even an outsourcer like Hillary Clinton might turn into a breadline madonna overnight. ;-)

This dire need could arise soon, or it could be averted. Much depends on how fast and painfully the hallucinatory housing market collapses, and what, if anything, can replace it.

[Catchawave]

20. On the Colbert Report.....

He took the Consumer Reports issue of the 2006 Top Ten Cars, which were Toyotas and Hondas, and fed it to a shredder. I thought it was funny, but maybe not :shrug:

[corporate_mike]

22. Who audits them? Arthur Andersen?

[DoYouEverWonder]

24. Accounting error raises GM's loss

17 March 2006

Struggling US car giant General Motors (GM) has been forced to increase its annual 2005 losses by $2bn (£1.1bn) due to accounting errors.

The company now says its losses totalled $10.6bn last year, with the additional $2bn caused by errors at a mortgage subsidiary.

GM said as a result it was now going to delay filing its 2005 annual report.

The company is also going to restate its results for the years 2000 to 2004 due to the same error.

http://news.bbc.co.uk/2/hi/business/4818950.stm


Gee they were just $2 Billion off. Where do these accountants get their degrees, from bubble gums machines?