As much as it will gall people here, I think they need to cut GM loose and try to save Chrysler. Say what you will about the Pentastar, but much of it's woes are due to being plundered by Mercedes-Benz and not endemic mismanagement. Given enough time and money Chrysler will survive. Am not so sure about GM anymore. They're just burning through money like crazy.
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GM posts $9.6B 4Q loss, burns through $6.2B cash
By TOM KRISHER and KIMBERLY S. JOHNSON
DETROIT (AP) - General Motors Corp. (GM) (GM) posted a $9.6 billion fourth-quarter loss and said it burned through $6.2 billion of cash in the last three months of 2008 as it fought the worst U.S. auto sales climate since 1982 and sought government loans to keep the century-old company running.
The nation's biggest domestic automaker said Thursday it lost $30.9 billion for the full year and expects an opinion from its auditors as to whether the company remains a "going concern" when its annual report is issued in March. That means the auditors will determine whether there is substantial doubt about the automaker's ability to continue operations.
Chief Financial Officer Ray Young said the determination will depend a lot on whether GM gets further government loans and whether it can accomplish its restructuring goals.
The company has received $13.4 billion in federal loans since Dec. 31 and says it needs up to $30 billion to stay out of Chapter 11 bankruptcy protection. Top GM executives were in Washington, D.C., Thursday to meet with the Obama administration's auto task force to talk about restructuring and additional loans.
"2008 was an extremely difficult year for the U.S. and global auto markets, especially the second half," Chairman and CEO Rick Wagoner said in a statement. "These conditions created a very challenging environment for GM and other automakers and led us to take further aggressive and difficult measures to restructure our business."
GM reported a net loss of $15.71 per share for the fourth quarter, compared with a loss of $722 million, or $1.28 per share in the year-ago period.
Quarterly revenue fell 39 percent to $30.8 billion from $46.8 billion, as credit availability froze across the globe, and a lack of consumer confidence and fears of job losses kept people from buying vehicles.
Excluding special items, GM's fourth-quarter adjusted loss was $5.9 billion, or $9.65 per share.
That was worse than Wall Street expected. Analysts surveyed by Thomson Reuters predicted a quarterly loss of $7.40 per share on sales of $35.1 billion.
For the full year, the loss was $53.32 per share, the second-worst annual result in the company's history. The worst loss occurred in 2007, when GM lost $38.7 billion, or $68.45 per share, in 2007, due largely to charges for unused tax credits.
GM shares fell 22 cents, or 8.6 percent, to $2.33 in premarket activity.
J03Y Esquire wrote:thank the unions
You can't totally blame the unions. This is the result of everyone and his mother raping GM for everything they could get. GM has consistently made sub-standard products that were priced too high and deluged markets with lookalike brands and salesproof cars.
Seriously, tell me how in the hell the Corvette never managed to be as good as Ferrari until recently? Why wasn't Cadillac a competitor for Mercedes-Benz and Buick a BMW killer? Why wasn't Pontiac the take-no-prisoners performance division it was supposed to be? For years and years and years GM has been cutting corners simply to fleece the public and make a grand or two more per car. Say what you will about Chrysler's quality, but at least there was always an aspiration to do better than everyone. You always got a sense that they had great ideas waiting in the wings. With GM you always got the sense that they were holding back their stuff, releasing it in small measures to pretend like they were innovating.
Greedy bosses and greedy unions are like gasoline and fire. It's just bound to end wrong.
If Ford or Chrysler has been this irresponsible, they'd already be gone. GM has survived due to it's sheer bulk and the fact that it was the number 1 company in the US once upon a time.
No longuer.
bummer
Im a Xbox 360 fanboy...and damn proud of it!!
when unions would rather have no work for their members, as opposed to considering any form of cuts......you can blame the unions.
people being paid $30/hr to push a broom simply because they are part of a union = BS
unions are like welfare....the good producers who earn their keep have to contribute to the less than desireable employees without question.
edit: but yes, i agree, it's not 100% union fault, but it certainly has a huge part in the problem.
edit 2: this isn't the first time Chrysler has needed a bailout either, so I wouldn't say they have been completely responsible.
Edited 2 time(s). Last edited Thursday, February 26, 2009 1:44 PM
When if comes to the US auto industry, we have @!#$ty options and @!#$tier options.
1. We keep them afloat unconditionally and spend God knows how much money in the long run doing it. The CEOs and management likely get to keep their jobs and the unions remain as strong and incompetent as ever. The problems with GM likely never get fixed and we keep them alive until the economy improves enough that their bad business practices are no longer enough to kill them off.
2. We do nothing, let them fail. Its satisfying but... they are gonna take alot of other companies(many of which are ran competently) with them and by so we end up ALOT of unemployed people,
who will now be on welfare(and therefore on your tax dollar anyways - except they get paid to do nothing instead of something). They won't have the money to make those house payments anymore(no matter if they where purchased within their means or not), so the housing market and banks are gonna be in even deeper @!#$, credit will dry up even further.
Panic may or may not ensue - but either way lots of businesses will go under because they can't even get the short terms loans they need to pay rent, utilities, buy materials/merchandise, and pay employees. Yes that means that even profitable companies can easily go under.
3. We keep them going... on stringent conditions. All their CEOs get replaced - of course the CEOs won't go along with this but... stockholders can decide this on their own (if they want GM to get bailed out then they'll
make it happen). I'd suggest trying to lure competent CEOs from successful manufacturing businesses(companies like CAT etc). A good chunk of management can get the boot too. Have all employees get evaluated and only the ones who are worth a damn get to keep their jobs... at a renegotiated (preferably performance-based) wage.
I'd like to see it that
highly productive employees get to keep their high wages, and less productive employees just get much lower earnings(or the boot if they suck too much). I think a base pay + "production/quality over quota" type bonus system will work nicely. Those who don't make quota don't keep their jobs. Period.
The reason that I'd like to see the possibility of workers(at least those who deserve it) keeping those high earnings is that you will likely see alot more home foreclosures if wages are universally lower - since formerly affordable houses aren't so affordable when you make half as much. It wouldn't be as bad as the scenario from option 2, but this could easily make things much worse than they are today.
Quiklilcav wrote:This all makes sense, but it will never happen as long as GM has their current contract with the UAW. The UAW is so retarded that instead of making concessions to keep their jobs, they will hold out and let the company collapse, and they all lose their jobs.
The only way out is bankruptsy, or complete collapse. If GM were to completely collapse, you can guarantee someone would come along and buy it up and restart it.
if the UAW are seriously dumb enough to cut off their nose to spite their face, then i say let them. economic darwinism at its best. doing so will allow GM to lower costs tremendously, making them profitable again.
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As much as it will gall people here, I think they need to cut GM loose and try to save Chrysler. Say what you will about the Pentastar, but much of it's woes are due to being plundered by Mercedes-Benz and not endemic mismanagement. Given enough time and money Chrysler will survive. Am not so sure about GM anymore. They're just burning through money like crazy.
I have to disagree with you there Knoxfire. GM has always built better quality and more dependable vehicles than Chrysler. Chrysler can possibly weather this storm better than GM because they're smaller but they need to totally rework the company for it to become profitable again. One thing Chrysler really needs is a totally new image since they've built cheap unreliable junk since the 80's thats what people associate with thier brands, except for Jeep for some reason, and why nobody is buying them unless they underprice the vehicles. If Chrysler management in the 80's wouldn't have went with the cheapest parts available they'd probably be in a better position.
Spike J wrote:Quote:
As much as it will gall people here, I think they need to cut GM loose and try to save Chrysler. Say what you will about the Pentastar, but much of it's woes are due to being plundered by Mercedes-Benz and not endemic mismanagement. Given enough time and money Chrysler will survive. Am not so sure about GM anymore. They're just burning through money like crazy.
I have to disagree with you there Knoxfire. GM has always built better quality and more dependable vehicles than Chrysler. Chrysler can possibly weather this storm better than GM because they're smaller but they need to totally rework the company for it to become profitable again. One thing Chrysler really needs is a totally new image since they've built cheap unreliable junk since the 80's thats what people associate with thier brands, except for Jeep for some reason, and why nobody is buying them unless they underprice the vehicles. If Chrysler management in the 80's wouldn't have went with the cheapest parts available they'd probably be in a better position.
I totally agree. But financially and organisationally speaking, Chrysler is leaps and bounds ahead of GM. Yes, they build junk, but that can be improved upon relatively easily. Just look at Hyundai. However, GM's problems are akin to a cancer. It goes down deep, is very entrenched and it's all very political. They build better cars but their inner workings are in shambles.
Or let me put it this way. Chrysler's fat, but GM's ugly... Chrysler can diet.
