Autoblog http://www.autoblog.com Autoblog http://www.blogsmithmedia.com/www.autoblog.com/media/feedlogo.gif Autoblog http://www.autoblog.com en-us Copyright 2009 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[GM reports net loss of $2.5 billion, more cuts and asks for help]]>http://www.autoblog.com/2008/11/07/gm-reports-net-loss-of-2-5-billion-more-cuts-and-asks-for-help/http://www.autoblog.com/2008/11/07/gm-reports-net-loss-of-2-5-billion-more-cuts-and-asks-for-help/http://www.autoblog.com/2008/11/07/gm-reports-net-loss-of-2-5-billion-more-cuts-and-asks-for-help/#commentsFiled under: ,

Ford Motor Company's third-quarter earnings report released earlier today basically said, "Times are bad, but we'll be aight." General Motors' just-released earnings report for the same time period says "Holy effin' hell, we're running out of things to cut, please help us!" We'll try and it keep it simple, but the main number is $2.5 billion, as in $2.5 billion lost during the Q3 '08. That compares with a $42.5 billion loss this time last year, but the bulk of that was attributable to a one-time charge against the books. Unfortunately, not only was GM North America revenue down, but the automaker claims the credit crisis has made its way around the world and contributed to losses in GM Europe and GM Asia Pacific, as well as its own financing arm, GMAC.

Here's the bigger story: General Motors burned through $6.9 billion of its cash reserves during Q3 '08, which reduces its bank account from $21 billion at the end of Q2 to $16.2 billion today. That's barely enough for such a big automaker to survive the coming winter, so In response, GM has announced to create an additional $5 billion of liquidity by the end of 2009. Below are the big changes we can expect.

  • Retiming select vehicle programs in North America and Europe by three to 12 months, i.e. lengthening product lifecycles
  • Deferring capacity expansion projects
  • Lower sales promotion spending, i.e. less advertising
  • Less support of dealer network activities and channel consolidations
  • Scaling back production
  • Curtailing discretionary spending (travel, consulting, over-time, etc.)
  • Increase reduction in force from 20 to 30%
Three other things deserve mention. The first is that rumors of the Volt being delayed are untrue. In fact, GM says that spending on the Volt and other fuel economy initiatives will be increased. The second is that GM acknowledged it was considering acquiring Chrysler LLC (though it wasn't named directly), but the merger talks have stopped for the time being. And finally, the main message GM wants to get out via its earnings report is that despite cutting spending even more, it considers government aid essential for its survival. So, ball in your court, Obama.

Follow the jump for a pair of lengthy press releases from GM.

[Source: General Motors]

Continue reading GM reports net loss of $2.5 billion, more cuts and asks for help

GM reports net loss of $2.5 billion, more cuts and asks for help originally appeared on Autoblog on Fri, 07 Nov 2008 12:31:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>breakingGMgm q3 earningsgm q3 lossGmQ3EarningsGmQ3Lossq3Fri, 07 Nov 2008 12:31:00 EST<![CDATA[GM loses $39 billion in third quarter, but autos are profitable]]>http://www.autoblog.com/2007/11/07/gm-loses-39-billion-in-third-quarter-but-autos-are-profitable/http://www.autoblog.com/2007/11/07/gm-loses-39-billion-in-third-quarter-but-autos-are-profitable/http://www.autoblog.com/2007/11/07/gm-loses-39-billion-in-third-quarter-but-autos-are-profitable/#commentsFiled under: ,

General Motors announced its third quarter earnings today and surprised Wall Street by revealing a $38.6 billion charge on the books that represents a change in tax accounting required by the Financial Accounting Standards Board's Statement of Financial Accounting Standards. That huge number represents tax credits the automaker can't account for until it actually earns the taxable income to which it applies.

Even without considering the tax adjustment of $38.6 billion and other special items like the $3.5 billion sale of Allison Transmission, GM still lost around $1.6 billion last quarter, compared to the $497 million profit it earned for the same quarter last year.

Despite the red ink on paper, GM's auto business actually performed well in the third quarter. It recorded a profit of $122 million compared with a loss of $577 million in Q3 2006. Global sales reached 2.39 million vehicles, up 4 percent from last year and a record for the company.

Nevertheless, the tax accounting adjustment that led to a total loss of around $39 billion stands as the largest quarterly loss ever for GM, surpassing the $21 billion hit the company took in 1992. As such, the announcement of GM's earnings today have been driving down the Dow Jones Industrial Average. At 11:48 AM EST, the Dow is down 143.80 points.

[Source: The Detroit News, BloggingStocks]

GM loses $39 billion in third quarter, but autos are profitable originally appeared on Autoblog on Wed, 07 Nov 2007 12:10:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>general motorsGeneralMotorsgmgm q3 earningsgm third quarter earningsgm third quarter lossGmQ3EarningsGmThirdQuarterEarningsGmThirdQuarterLossWed, 07 Nov 2007 12:10:00 EST