Posted on 12/13/2010 9:55:15 AM PST by jazusamo
Using inventory to fudge the books is a common tactic for MOST autos. My former roommate was a comptroller at a national auto dealership chain, and he regularly had to count inventory on-hand as a “potential sale.”
Being a government owned operation, GM can lie, cheat and steal, and not be called for it.
Anyone who buys stock in GM deserves to lose their money!
Agreed and I’m no business person but it seems out of the ordinary to me they’d have over a third more than their normal inventory, especially when it coincides with the IPO.
This reminds meb of a past announcement by
IBM about having shipped 70,000 copies of OS/2.
The retail channel responded that, “Shipped ain’t sold”.
In fact, most of those units ended up dumped in
surplus stores with the seals intact. Nobody wanted
the product.
That’s what I was thinking. Dealers are out a lot of extra bucks and that money costs them. It might be different if the economy was booming but it isn’t.
GM related. Crony Car Capitalism http://www.freerepublic.com/focus/f-bloggers/2639289/posts
Another Enron-style accounting rules waiver?
This is not an uncommon practice - especially when the government is involved...
Excellent article, thanks for posting.
No doubt that this bailout was much to do about an Obama and thugs payback to the UAW, he owed big to unions in general.
This is so blatantly corrupt it’s pathetic, the Chicago Way, and should land him and cronies in federal slammer but it’ll never happen.
Well, clearly they’re going to need another cash for clunkers program pretty soon. Obama can bail out the Dealers by buying up their stock and scrapping it. Then GM can improve its balance sheet going by selling them more.
Otherwise, they’re liable to run out of room in the dealers’ lots.
Or, another idea, they could just put the extra unsold cars out in the streets with the keys in the ignition, so illegal aliens can steal them and sell them for a few bucks. After all, they’re probably worth at least the price of gas in their tanks.
It's actually 58% more than the recommendation, 42% more than industry average.
One of many reasons why decent people don’t invest in corrupt companies. I am boycotting GM, both as a consumer and as an investor. Avoiding these deceptions is just a bonus on top of the pleasure in doing the right thing morally.
It’s to the point with this corrupt turkey in the WH most anything can happen. Things that used to be out of the question for a president are now common occurrences.
There’s little doubt that if dealers start going belly up due to this Zer0 and thugs will bail them out.
Whether the cars were actually needed or not, it kept union workers busy making them. Makework projects to keep union workers employed, that's not a new idea at all.
Question is, what to do with them? Back in the old embargo days, there were rumors that the Japanese bought US cars (as a sign of fair, two-way trade in autos) them dumped them off the transport ship in mid-ocean. I wouldn't be surprised if surplus GM cars are bought by US fleets, given away or sold for scrap having never been driven. Government ownership means government waste, after all, and we can't have all that unsold inventory depressing demand.
Alternatively, Obama may be looking for ways to MAKE people buy GM, like tax incentives or Cash-for-Clunkers II...
You’re correct and that seems a huge amount to me.
No doubt you’re right, the Criminal In Chief will come through for GMUAW.
This shouldn’t surprise anybody who’s paying attention.
#1) GM’s IPO prospectus explicitly states that the company’s internal controls are inadequate, and that its financial statements are untrustworthy.
#2) Phony accounting is universally employed by governments and state-owned enterprises.
#3) Inventory builds reduce unit fixed costs and increase profitabily of sales. It has been a standard technique in the auto industry for decades.
#4) Under any just system of bankrupcy law (similar to that which existed before Obama), GM would be considered to be a criminal organization whose assets have been stolen from its bondholders.
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