GM adds a couple hundred mil to Q2 losses; GMAC sale may not come until '07
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Despite the fact that Wall Street is giddy about General Motor's performance in the second quarter of 2006, the automaker still lost $3.2B due mostly to write-downs associated with employee buyouts. Or, rather, make that $3.4B, according to a filing with the Security and Exchange commission. The discrepancy - one of several in recent months - comes as the company takes an additional charge of $200M related to a difference in declared value and taxable value of some GMAC assets.
And while the automaker was on the topic of GMAC, it also saw fit to mention that the sale of GM's lending arm might not be completed this calendar year. Apparently, the Federal Deposit Insurance Company has placed a six-month halt on the sale of any industrial loan companies, and that includes GMAC. The impact of this isn't known at this time, but it's unlikely to be severe, and GM states that the details of the sale will still be worked out by the fourth quarter of this year.
[Source: Reuters]
Reader Comments (Page 1 of 1)
Miyoshi 3:00PM (8/02/2006)
Cue Import vs. Domestic rants, GM turn around theories, GM doomsday theories, and personal experiences with GM products.
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Jason 4:05PM (8/02/2006)
Cue pointless prediction of following post types by someone pretending to be superior and above it all, yet really having nothing to say.
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Ryan 4:16PM (8/02/2006)
Cue the people who cue the people...
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Luis Longo 5:05PM (8/02/2006)
Haha.
They always do that,
just like that year,
they say they loss and
then they say they loss
more, too bad they dont do
this with profit ha? lol.
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robino 5:30PM (8/02/2006)
I'm waiting for them to tell us they have lost less than they thought. I have a sneaking suspicion my ex-wife is running this company and Ricky-boy is just standing there for the benefit of Wall Street.
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Fabulo 6:50PM (8/02/2006)
income - expense = profit
If the expense number happens to be bigger than the income number, the word profit has to be changed for loss.
However, it is not as simple as that. Different deals that have nothing to do with car sales are 'booked' at different times, adding some one time expenses (each quarter seems to bring its new load of extraordinary one time expense). The sale of GMAC (if it goes through) should bring in some much needed cash, but also hit the bottom line (because GMAC is actually profitable)
Also, after GMAC is gone, who is going to offer 0% loan/5 and 6 years? Borrowing money cost money, so will GM put down some of its own money to finance the unrealized income from the lender (which no doubt will remain GMAC)
In 07 will begin the round of union contract negotiation. I have no confidence in GM management to scale down the (totally uncompetitive) conditions of the current contract.
I'm just a pessimit. I'd like to see _real_ recovery at GM. I just don't see any sign of it.
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Nicky 8:14PM (8/02/2006)
Can't find GM sales by type for July???
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Finished.Law.School 10:04PM (8/02/2006)
Don't you just love how the UAW really loves their role as a parasite to the US auto industry?
Of you get rid of the UAW you get rid of the mass majority of problems with US automakers.
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Finished.Law.School 10:06PM (8/02/2006)
That was supposed to say, "If you get rid of the UAW you get rid of the mass majority of problems with US automakers."
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Rastus 12:00AM (8/03/2006)
GM is the "Wigger" of the US ...or for that matter, the GLOBAL auto industry.
You guys are LOSERS...shit, you can't even tabulate your own loss? God DAMN Daryll!!!
:D
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