Autoblog

psarhjinian @ Apr 30th 2008 11:18AM

A lot of this is due to GM, ahem, not stating losses in previous years due to anticipated profit that never happened. Accounting regulations didn't allow them to continue doing this; they had to disclose said losses now.

There's debate as to how good/bad this is :good in that it's a one-time thing, bad in that it means GM was camouflaging how bad things really have been for the past several quarters.

GMAC's position is painful, but it's important to note that GMAC's profits had been floating GM through the last decade. It's not like GMAC has been an albatross for years; they're probably the reason GM is still viable now, and yes, dumping large chunks of them prior to the subprime mortgage crisis was smart.

GM's operational issues are the problem here; they've been losing money in North America for years and it's only an issue now because they haven't been able to hide it any longer. Despite decent product (the Malibu, Cadillac, the GMT900s and Lambdas) they still have too many divisions and models, and they still have a lot of mediocre cars that just aren't moving, especially in the economy market. Ford isn't hurting as badly because Ford seems to understand that they have to have a balanced product mix (Ford is, on the whole, better than average; GM has serious weaknesses) and that it's better to be small and profitable than huge and money-losing. GM doesn't seem to "get" that it doesn't have 50% of the market anymore, and can't waste resources on flashy crap and needless rebadges.