GM needs bailout, workers need to sacrifice? Read their annual report.

[Hannah Bell]

P. 6:

GM's core automotive business generated 178 billion in 2007, an improvement of 7 bill over 2006.

"Adjusted" automotive earnings = 553 million.

Total adjusted net loss (excluding "special items") = 23 million, "reflecting a 1.1 billion loss attributed to our 49% stake in GMAC". I.e. the loss comes from their finance dept., specifically mortgage loans - p. 7 - NOT their auto division.


p. 7:

With "special items", the corp lost 38.7 billion: "almost entirely attributable to the non-cash 38.3 billion special charge in the 3rd quarter related a non-cash valuation allowance against deferred tax assets. The valuation has no impact on cash and does not reflect...long-term financial outlook".

My read: scam whereby they're allowed to book pseudo loss to short the taxman.

Now running at 9 billion less in structural costs than 2005-06.

Pension funds "20% overfunded" - don't expect to have to make any contributions to pension funds in the forseeable future.

Salaried retiree healthcare "capped", hourly healthcare now paid from "independent trust", resulting in savings in future of 6 billion/yr.


p. 8:

Sold more than 9 million cars, 4th time in GM history. GM Europe fastest-growing car corp there, up 9%; #1 in China, Latin america up 19%. 59% of GM sales now outside US.


p. 11:

Will reduce US costs 5 billion more by 2011, continue growth overseAs, forecast half of sales by 2017.


p. 15: russia!

p. 16: china!

p. 18: s. africa! europe!

p. 47:

"in 2007, the automotive industry continued to show strong sales & revenue growth," sales growth of 19% 2003-2007, revenue growth = 7%/yr, 9.4 vehicles sold 2007 v. 9.1 2004.

GM share grew in all markets EXCEPT GM North America. What a coincidence. They're booming everywhere else, but just can't get it together in the US.


p. 52:


(Dollars in billions) 2007, 2006, 2005

Automotive net sales and revenues $178, $171, $159

Contribution costs (a) $124, $119, $110

Structural costs (b) $53, $,51 $,55

Impairment, restructuring and other charges (c) $2 $7 $5

(a) Contribution costs are expenses that we consider to be variable with production. The amount
of contribution costs included in Automotive cost of sales was $123 billion, $118 billion and
$109 billion in 2007, 2006 and 2005, respectively, and those costs were comprised of material
cost, freight and policy and warranty expenses. The amount of contribution costs classifi ed
in Selling, general and administrative expenses was $1 billion in 2007, 2006 and 2005 and
these costs were incurred primarily in connection with our dealer advertising programs.

(b) Structural costs are expenses that do not generally vary with production and are recorded in
both Automotive cost of sales and Selling, general and administrative expense. Such costs
include manufacturing labor, pension and other postretirement employee benefits (OPEB)
costs, engineering expense and marketing related costs. Certain costs related to restructuring
and impairments that are included in Automotive cost of sales are also excluded from structural
costs. The amount of structural costs included in Automotive cost of sales was $40 billion,
$39 billion and $44 billion in 2007, 2006 and 2005, respectively, and the amount of structural
costs included in Selling, general and administrative expense was $13 billion, $12 billion
and $11 billion in 2007, 2006 and 2005, respectively.

(c) Impairment, restructuring and other charges are included in Automotive cost of sales.


TOTAL LABOR, BENEFITS, PENSIONS (including non-manufacturing such as marketing) = 53 billion, 13 billion of which = ADMINISTRATIVE (7.3% of revenues). Production labor/retirees = approx 22% of revenues.


p. 68

7 billion spent on "property"
10 billion spent on securities & acquisitions


p. 69: credit

"We also have a $4.6 billion standby revolving credit facility with a syndicate of
banks, of which $150 million terminates in June 2008 and $4.5 billion terminates
in July 2011."

So they need gov't $$$$ - WHY?


p. 71:

Health plan (OPEB) underfunded by 43 billion. (How does this happen?)


p.

LABOR FORCE
On a worldwide basis, we have a concentration of our workforce working
under the guidelines of unionized collective bargaining agreements. The current
International Union, United Automobile, Aerospace and Agricultural Implement
Workers of America (UAW) labor contract is effective for a four-year term which
began in October 2007 and expires in September 2011.

Our current contract established a new wage and benefit structure for entry-level employees hired
after the effective date of the contract in certain non-core positions, such as
material movement, kitting and sequencing functions and certain stamping and
subassemblies positions. These employees will receive base wages of approximately
$15 per hour and will have a higher cost sharing arrangement for health
care benefits.

Additionally, the contract includes a $3,000 lump sum payment
in 2007 and performance bonuses of 3%, 4% and 3% of wages in 2008, 2009
and 2010, respectively, for each UAW employee. We amortize these payments
over the 12-month period following the respective payment dates. Active UAW
employees and current retirees and surviving spouses were also granted pension
benefit increases. Refer to Note 15.

Our previous UAW labor contract was effective for a four year term which
began in October 2003 and expired in September 2007. This contract provided
for a $3,000 lump sum payment for each UAW employee which was paid in
October 2003, and a 3% performance bonus for each UAW employee, which was
paid in October 2004. We amortized these payments over the 12-month period
following the respective payment dates.

UAW employees received a gross wage increase of 2% in 2005. For 2006, these employees were also granted a 3% gross wage increase under the labor contract, which was subsequently agreed
between us and the UAW to be contributed to a Mitigation Voluntary Employee
Beneficiary Association (VEBA) as a wage deferral, in connection with the 2005
UAW Health Care Settlement Agreement. Refer to Note 15. Active UAW employees
were also granted pension benefit increases. There were no pension benefit
increases granted to current retirees and surviving spouses. However, the contract
did provide for four lump sum payments and two vehicle discount vouchers for current retirees and surviving spouses.


p. 130

lists over 50 bigwigs, ceos, division heads, etc.

The top 5 bigwigs took home over 10 million in straight salary 2007. How much do 50 bigwigs get?

Doesn't say.


http://www.gm.com/corporate/investor_information/docs/fin_data/gm07ar/download/gm07ar_full.pdf

[Hannah Bell]

1. GM to slash up to 31,500 jobs

http://www.google.com/hostednews/afp/article/ALeqM5j_SKi06jsL2ceEfOWDLIeqV-eYfg

CHICAGO (AFP) — General Motors told lawmakers Tuesday that it plans to cut up to 31,500 more jobs in the United States, as it confronts a severe slump that has it begging Congress for an 18-billion-dollar bailout.

GM said it planned to reduce its total US employment from the current level of 96,537 people to between 65,000 and 75,000 salaried and unionized workers by 2012.

The total number of US plants would be cut to 38 in 2012 from 47 in 2008...

A landmark labor agreement reached last year has lowered GM's total costs for new workers to 25 to 35 dollars an hour compared with Toyota's average US labor cost of between 45 and 50 dollars per hour, GM said.

GM forecast its labor costs for union workers in the United States would drop to 4.5 billion dollars a year in 2012 from 8.1 billion dollars in 2008 and 18.4 billion dollars in 2003.

North American structural costs are forecast to fall to 23.2 billion dollars or 24.8 percent of revenue in 2012 from 30.3 billion dollars or 33.9 percent of revenue in 2008 and 39.6 billion dollars or 32.2 percent of revenue in 2004.

http://www.google.com/hostednews/afp/article/ALeqM5j_SKi06jsL2ceEfOWDLIeqV-eYfg



"This is a significant and important change to the company's long-term viability, GM said, adding that it has spent over 103 billion dollars on retiree healthcare and pension expenses in the past 15 years.


This is spin, I think. From the annual report, I gather they had to put make-up money into these funds in order to dump them on the union - because they'd been UNDERFUNDING for years.

If they'd ust paid what they were supposed to, or just done pay-go instead of using their workers' compensation as a slush fund...they wouldn't have had the expense.

[ContinentalOp]

4. Hahaha, what?

"A landmark labor agreement reached last year has lowered GM's total costs for new workers to 25 to 35 dollars an hour compared with Toyota's average US labor cost of between 45 and 50 dollars per hour, GM said."

But I thought people who buy Toyotas are anti-union and anti-US worker? :shrug:

[Possumpoint]

2. I Oppose

all bailouts. Nothing said so far has changed my mind. I want TARP stopped and all taxpayer money refunded. Despite the transparity legislated into TARP Mr. Paulson has ignored it. Let the cards fall where they may.

[Dogmudgeon]

3. The UAW should just BUY the auto makers

They can run the companies as lean, highly productive employee-owned shops.

Repurposing factories to produce mass transit and energy infrastructure (especially wind turbine units) would be a smart move, too.

--p!

[onethatcares]

5. with that I can agree.

what better way of keeping the jobs here, and expanding the job base. As long as some of the animals don't get to be more equal than the others, I see no reason not.

[Hannah Bell]

6. According to the report, they would have made a profit last year except for mortgage

losses & some bogus charges they could book whenever they want. They spent more than 18 billion buying property & investment securities. Their labor/pension/health costs are ALREADY lower than Toyota, per last year's contract. They've ALREADY got several credit lines in the billions.

Besides which, they're opening plants left & right overseas. WTF is this bailout about besides exacting MORE concessions from the union & stealing from the taxpayers?

Besides which, they just announced they're going to lay off up to 31 thousand workers ANYWAY.

The only market they lose $ in is the US. I'm thinking by design.

[Hannah Bell]

7. GM sold more cars than any other maker in 2007. What's wrong with this picture?

http://www.autoblog.com/2008/01/03/by-the-numbers-2007/

[ColbertWatcher]

8. Kick, too late to rec! Thank you for posting. n/t