Posted on 02/12/2008 4:46:14 AM PST by John W
General Motors Corp. reported one of the largest losses ever for an automotive company Tuesday as it struggled to turn around its North American business amid a weak economy. Also this morning, the company offered a new round of buyouts to 74,000 U.S. hourly workers. GM said it lost $38.7 billion in 2007. The loss largely was due to a third-quarter charge related to unused tax credits.
The Detroit-based automaker also on Tuesday said it was offering a new round of buyouts to all 74,000 of its U.S. hourly workers who are represented by the United Auto Workers.
The 2007 loss topped GM's previous record in 1992, when the company lost $23.4 billion because of a change in health care accounting, according to Standard & Poor's Compustat.
Excluding the tax charge and other special items, GM lost $23 million, or 4 cents per share, for the year, compared with a net income of $2.2 billion in 2006, beating Wall Street's expectations. Analysts polled by Thomson Financial expected GM to post a full-year loss of 95 cents per share.
GM posted a loss of $722 million, or $1.28 per share, in the fourth quarter, compared with a net income of $950 million in the year-ago quarter. Fourth-quarter charges included $622 million to Delphi Corp., GM's former parts division, for its restructuring efforts.
GM reported $181 billion in revenues for the year, down from $206 billion in 2006. But the automaker said its automotive business saw record revenues of $178 billion in 2007, up $7 billion from a year ago thanks to growth in emerging markets and favorable exchange rates.
But GM's North American division continued to struggle, posting a $1.5 billion loss for the year.
GM's results also were dragged down by its 49 percent stake in GMAC Financial Services, which lost $2.3 billion in 2007. GM reported a $1.1 billion loss attributed to GMAC.
GM barely retained its title as the world's largest automaker in 2007, selling just 3,000 more vehicles than Toyota Motor Corp. GM sold a total of 9,369,524 vehicles worldwide, up 3 percent from the year before.
I guess Ditech and subprime car loans weren’t such a great cash cow after all.
All 74,000 union workers are included.
I was wondering if GMAC Mortgage played a part in this.
Make crappy, overpriced vehicles, and you get crappy finacial reports.
A couple billion here, a couple billion there - pretty soon your talking real money.
The weak dollar will probably not help GM as it will have to pay more for all the outsourced material.
Word on the street here in Detroit is that this is a good sign for GM. Most of the loss was an accounting loss from tax breaks, and the revenues are up.
Wall Street has the stock futures going up, so it’s not the doom and gloom the headline would suggest.
Why spend the extra $12K when I know that's coming up?
They just announced new incentives on trucks and SUVs, so I’m waiting for my dealer to call with the numbers so I can continue my quest to destroy the environment and buy my new SUV.
Far too many factors to be able to fully address them in a post. But I will throw a few into the hat:
GM quality has not meant much in the last several years. After a short upswing, observed quality has fallen in the last 7 year or so, with no apparent effort to rectify the situation.
Design - some really ugly designs have come through GM in the last several years. Remember - the first thing that attracts customers is looks, then followed by quality (and a growing number looking for fuel efficiency).
Some not-so-good business decisions as a whole - investing in some real losers (like Daewoo a few years back). Then the investments in credit companies...ugh.
Feel free to add...
By the way - are Honda and Toyota bleeding cash and laying off/buying out tens of thousands of employees???
I dunno - I know some folks who bought basically identical vehicles - one under the “employee pricing, the other just before - and the one that bought the one before actually paid a bit less.
In reality, a salesman that we have done business with a couple of times was telling us that the “employee pricing” was a gimmick - the prices were in the ballpark of what the prices were with the incentives (rebates) before.
“Excluding the tax charge and other special items, GM lost $23 million, or 4 cents per share, for the year, compared with a net income of $2.2 billion in 2006, beating Wall Street’s expectations. Analysts polled by Thomson Financial expected GM to post a full-year loss of 95 cents per share.”
Looks like their performance exceeded expectations, by a lot.
It’s been some time now since GM made a crappy vehicle.
Yeah, I'd say that this is pretty crappy engineering and quality control.
You didn’t read the article. The losses came from the credit card division...GMAC financing. GM is still the number one automaker in the world.
Apparently you haven’t driven a gm car lately. My tahoe is great and try the g6.
True!
I love my 05’ Silverado 2500HD and 07’ Tahoe LTX!
Ditech sucks money from the auto financing and GMAC is an A paper only car loan venue....................18% only are across the board A paper...........a losing percentage..
‘01 GMC Sierra 4WD extended cab. 1 recall for tailgate cables. Otherwise, perfect.
all Chevys .except the Vette and all Buicks are gonna be offered at world classs pricing this summer and early fall...The quality is the reason.....GM will set sales records AND QUALITY not seen since the mid 60’s.
......I do work for GM and have for 21 years
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