Monday, November 16, 2009

Meanwhile, on the other side of Detroit...

Hey, you didn’t think that we were going to give you a cheery Chrysler update without some news on the government’s other auto bailout fiasco, did you?

General Motors Co. says it lost $1.2 billion from the time it left bankruptcy protection through Sept. 30, far better than it has reported in previous quarters and a sign that the auto giant is starting to turn around its business.

The company also says it will begin repaying $6.7 billion in U.S. government loans with a $1.2 billion payment in December. It could pay off the full amount by 2010, five years ahead of schedule, but the money will come from funds loaned by the government.

The GAO has serious reservations that GM will ever be able to pay-off its Bailout cash infusion.

And later in the article…

The company cautioned that the earnings numbers mean little because they don't comply with U.S. accounting standards and cover only the part of the quarter after GM left Chapter 11 bankruptcy protection on July 10.

So, let’s get this straight: We’re supposed to take comfort in the fact that we may actually get some money back from this atrocious deal because a) GM has only lost $1.2 billion since coming out of bankruptcy, b) they’re repaying the bailout with money from… other government loans and c) any optimism from improved earnings numbers is sketchy because they don’t comply with U.S. accounting standards (is this another break one gets for being owned and operated by the U.S. government?).

You’ll have to forgive our skepticism given what we are reading, prima facie.

And check this out:

GM said its improved performance was fueled by new products including the Chevrolet Camaro muscle car, and the Chevrolet Equinox and GMC Terrain midsize crossover vehicles. The company's top sellers through October were the Chevrolet Silverado pickup truck and Impala full-size car.

Back in July, we opined on the totally bitchin' new Camaros that had just come out and wondered on the possibilities of a GM comeback based upon 6 and 8-cylinder muscle cars. Oh the delightful irony.

On that post, B-Daddy commented: "I could almost forgive Chrysler and GM if these vehicles turn out be quality products. THAT is how you apologize to America! Build a product that we will love."

Indeed. Unless you are sucking at the teet of government grants for electric cars that will sell for anywhere from $40 – $90,000, no one seems to be real excited about electric cars or the small green death traps we are all told is the future of domestic auto manufacturing.


Anonymous said... isn't the 1.2 billion in "managerial" losses? whatever the heck that means. and:

"GM posted revenue of $28.0 billion in the third quarter of 2009 (July 1-Sept. 30, 2009), which was up approximately $4.9 billion compared to the revenue recognized by General Motors Corporation, or "Old GM," in the second quarter of 2009."
So, if I read this correctly, they made almost $5 billion more in the 3rd than the 2nd...right?
Of course this comes from a supposed "Independent Automotive Information Resource" ( but there is so much financial mumbo-jumbo that even a 'math guy' has problems figuring it out!!!!

Road Dawg said...

Wait a minute, this isn't what I heard on the news?!?!?!?!

B-Daddy said...

Earlier, someone, I believe Professor Perry at Carpe Diem, said the real threat to GM wasn't so much government take over but government regulation, because they wouldn't be allowed to sell enough muscle cars and trucks to make the profit they needed due to CAFE standards.

Dean said...

If the government is continually willing to pump money into GM regardless, are "regulations" and "profitability" factors anymore?

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