• Aug 1, 2008
General Motors reported its second quarter earnings this morning, and the news was predictably grim. The General lost $15.5B in the quarter, as the Detroit Automaker continues to struggle with brutal market conditions and the costs associated with strikes and downsizing. Among the losses is a $4B hit from automotive operations, as stymied truck sales resulted in an 18% drop in revenue to $38B. GM's credit arm lost another $2.5B from high loan default rates and huge losses from truck and SUV lease residuals.
Another $9.1B came from one-time charges associated with GM's massive restructuring and the American Axle strike. Among the charges was a $3.3B write-down to pay for buyouts to the 19,000 UAW members that left by July. Overall, GM lost a staggering $27.33 per share in the quarter, which is even more amazing considering the General's stock is trading at about $10 per share. Among the actions GM took this week to help stem its bleeding balance sheet was ending all leasing in Canada, raising lease costs here in the States, and the announcement of 5,000 white-collar job cuts.

We're no industry analysts and we don't have any insights into the General's balance sheet, but a $15.5B Q2 loss and four straight quarters of red ink doesn't sound good at all. New fuel efficient products like the Chevy Cruze and Volt can't come soon enough, though it will be an even bigger challenge trying to make money off these small and ultra-fuel efficient cars.

[Source: Detroit News]


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  • 62 Comments
      • 6 Years Ago
      Ha Ha!

      That's what you get for Killing the Electric Car!

      Don't feel sorry for them one bit!
      • 6 Years Ago
      GM, FORD and CHRYSLER are turning out better products now than they ever had before. And now they are losing more money than ever before because America's government has sold it out to foreign lobbyists, oil greed and special interest.

      Meanwhile, Japanese and Koreans sell their cars here easily while ours face huge tariffs that leave them rotting on their docks since no one over there who wants them - except the super rich - can afford them.

      When is AMerica going to become protectionist?

      If I were President, right now, I guarrantee you Japanese, Korean and German cars would be hit with tariffs and taxes so hard that they'd end up lowering their tarrifs on our cars... or they simply wouldn't be able to sell their cars hear at all.
      • 6 Years Ago

      Why do you spam your site here so often?
      • 6 Years Ago
      Cool, in just one quarter the company managed to loose more than it's market capitalization. Right on!
        • 6 Years Ago
        Yeah have to wonder if they are sitting in the board room asking how they ended up 15B in the hole while the oil industry that benefits largely from the auto industry posts record profits?
      • 6 Years Ago
      If you think Chrysler's lineup is better than it ever was, you're either mentally retarded or insane. They have no small car. The avenger/sebring is awful. They have a challenger, a few trucks, and that's about it.
      • 6 Years Ago
      BGJ, hang on to that delusion. Japan is a country with no natural resources and not that long ago lost a war. American car companies have had it pretty easy, everything was going their way for a long time. It's not Japan's fault that the big three were so short sighted.
      • 6 Years Ago
      Has anyone looked at GM's market cap?
      The whole thing is only worth < $7b. I'm not advocating this but If it weren't for the threat of a congressional freak out don't you think the Chinese ,Indians or some other emerging country would've bought them?
      • 6 Years Ago
      Years of questionable products and inefficient vehicles finally caught up with them. It's too bad the Malibu came too late to save GM. We may never see the Volt. Even if we do, it will be a POS because it was rushed out of the door.
      • 6 Years Ago
      That stupid axle strike cost them 9 billion dollars? WTF. Some guy who assembles a god damn axle does not need 50 grand a year. I hate the unions, they are killing the Big 3.

        • 6 Years Ago
        Ah. Okay. Still, that's almost a billion dollars. Unions ARE killing Detroit.
        • 6 Years Ago
        So Vintage... you think the GM worker deserves to make McDonald's wages making axles while the non-union worker makes the same basic axle for his company earning about the same? Honda & Toyota pay their unskilled labor a competitive wage.

        People who blame the UAW for the faults of the Detroit 3 are misinformed or misguided. Bad product planning, bad marketing, very bad dealers have been the former Big 3's problem.

        Its amazing how the working middle class has become the whipping boy for the failures of the US economy. Based on talking points barfed out by mostly ultra wealthy conservatives, waving the American flag as their buddies ship their manufacturing base to Taiwan or China & claim their corporate HQ in the tax free Cayman Islands.



        • 6 Years Ago
        Ack. Can't read. Need coffee. Sorry.
        • 6 Years Ago
        $197,000,000 = 1,000,000,000??

      • 6 Years Ago
      GM is swimming in red ink because of poor management and greed. They should not have solely focused on big trucks, SUV's.They should have developed a more diverse product mix with fuel efficient cars.

      GM will survie if Wagoner and the top management are replaced. They have no vision and they are the people who landed GM in this situation. Unfortunately that will only happen when GM is almost dead.
      • 6 Years Ago
      Its sad to see that a company of this size is in such dire straits. It's easy to blame the union for the all the problems that GM is now facing; but in reality, the Management team of yesteryear played a critical role in the company's decrease of market share. The company's position now is a culmination of poor quality, bad designs, and poor decision making.
        • 6 Years Ago
        "poor decision making"?? If you were an auto executive, and you had to place your limited R and D budget, where would you place it: in very profitable trucks and SUVs, and sports cars (guaranteed hits) or in a small car that you know won't sell and will probably reduce the cache of one of your brands.

        With gas seemingly stuck at $40 a barrel, it was an easy decision.
      • 6 Years Ago
      Don't count us out yet. Our new cars and crossovers are proof that we can compete, and we are well along in creating a whole new family of cars and crossovers, many based on global architectures. (See recent GM spy photos if you don't believe me.) The rapid loss of truck sales and sharp drop in overall sales are tough for everybody. But this is a scrappy company. We are her to stay.
        • 6 Years Ago
        I wish GM well Tom... but sadly we are in the minority.

        The Big 3 have done themselves no favors. In the late 70 & 80s Detroit was caught flat-footed by better made (with better fuel economy too) Japanese imports. They worked hard & rebounded to match the japanese, only to watch them jump ahead in the premium brands of cars.

        Sure there are profitable periods... but we are always saying the next big thing is gonna save us. Many have just moved on.

        This is coming from a person in a Chrysler family.... I've seen a helluva rollercoaster in 30+ years.
        • 6 Years Ago
        My neighbor works for one of the big three and brags about all the money he makes doing nothing. He purchased a new truck made by one of the big three and it is less than 2 yrs old and has a puddle of liquids leaking from the truck he built but complains about his pension and benefits while making over 100K per year. The big three got where they are because they make junk and charge far to much for it. The big three want the taxpayers to give them our money to get them out of trouble. If they made a quality product at a reasonable price they wouldn't be in the trouble they are in. The Honda, Nissan, and other companies who built cars in the USA are not in trouble and make a much better product at a more reasonable price. I feel our government should lend not give them the money they need like they did with Chrysler. Make the CEO's and CFO's take huge pay cuts because they didn't do their job right.
        • 6 Years Ago
        Cheerleader tryouts were last week. But work on your kicks and we'll keep you in mind.
        • 6 Years Ago
        LOL

        yeah... OK.
        • 6 Years Ago
        i thought saturn from the 90's was supposed to save GM. No maybe the Opels from europe, no its the Vibe made by toyota, or maybe the Volt that cant be shown in public. or what about the Malibu MAXX... come on doesnt everyone want a sunroof in the back seat and a stereo that turns its volume up when you drive faster to drown out the engine noise... Wow i didnt even see these losses coming
        • 6 Years Ago
        Where have I heard that before? I think it was back in the early 90's. No mid 90's. No late 90's early 2K.
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