GM: $4.3 Billion Loss since bankruptcy

[jpd80]

From The detroit News:
General Motors Co. posted a $4.3 billion net loss last year, according to a financial report released this morning that offers the first comprehensive look at the company's finances since it emerged from bankruptcy court in July.

The automaker also posted global revenue of $57.5 billion at the end of December and had generated $1 billion in net cash.

The bulk of GM's $4 billion in fourth-quarter losses were in North America, where GM lost $3.4 billion.

Chris Liddell, GM's vice chairman and CFO, said GM must return to profitability. He said the fourth quarter loss "gives you some sense of the financial hill we intend to climb."

GM had $36.2 billion in cash on hand at the end of last year. GM revalued its physical assets, valuing them at $19 billion -- an $18 billion reduction over what they worth before GM's bankruptcy filing.

The $4.3 billion net loss included a $2.6 billion pre-tax settlement loss related to the United Auto Workers retiree medical plan and a $1.3 billion foreign currency re-measurement loss, GM said today.

The financial report, which was delayed a week, represents a significant milestone for GM and reveals a new balance sheet for the company with new values attached to assets and liabilities.

GM lost $3.4 billion in North America in 6 months since bankruptcy?

Anyone who thought that bankruptcy would magically fix GM illness are in for a rude shock,
the best thing the government and UAW can do is cut their losses and get whatever money
they can out of share float later this year. Whatever happens to GM after that is not their fault.

[vztrt]

Bankruptcy reduced their enormous debt, but it would seem that poor leadership is just putting them back in their. Will need more info to work out what these muppets are doing.

[The Snout]

Bit of detail.


http://www.google.com/hostednews/ap/...nCl0AD9EUF3GG1


GM ready to repay govt loan, sees chance of profit

By DEE-ANN DURBIN (AP) – 47 minutes ago

DETROIT — General Motors Co., steadily returning to health after its near-collapse in 2009, said Tuesday it plans to pay off its government loans by June — five years ahead of schedule — and could report a profit as early as this year.

GM said it lost $3.4 billion in the fourth quarter of 2009 on revenues of $32.3 billion. But things are on the upswing. Sales and production have increased and GM has gained U.S. market share since the start of the year. The automaker will try to maintain that momentum while facing a stiff challenge from a revitalized Ford Motor Co.

For the period from July 10, when GM emerged from bankruptcy protection after shedding billions in debt, through Dec. 31, GM lost $4.3 billion on revenues of $57.5 billion. But much of that loss was for one-time items, including a $2.6 billion payment to the United Auto Workers union for retiree health care. The company also reported several indicators of improving health: It took in $1 billion more than it spent in the period and began this year with $36 billion in cash and $60 billion in debt. At the start of 2009, it had $14 billion in cash and $104 billion in debt.

"General Motors should never again be in the financial position it found itself in last year," GM Chief Financial Officer Chris Liddell said during a conference call with analysts and media.

Repaying $6.7 billion in government loans has been a top priority for CEO Ed Whitacre. The government's autos task force set a repayment deadline of 2015 as a condition of giving GM the loans last year. As of the end of March, GM has paid back $2.4 billion and Liddell said GM plans to pay the rest by June at the latest.

GM owes an additional $45.3 billion to the government. That will be repaid when GM makes a public stock offering, which Liddell says will happen "when the markets and the company are ready."

David Kudla, CEO of Mainstay Capital Management in Grand Blanc, Mich., which manages investment accounts for many GM retirees, said he's encouraged that the company is paying off its loans faster than expected. A year ago, he said, many people weren't sure GM would survive.

Kudla said GM has made some good decisions, including restructuring its balance sheet, investing in better products and shedding brands.

"They're not only putting themselves in a position to survive going forward but to thrive going forward," he said.

Kudla said among GM's biggest obstacles now is the sluggish economy, which has dragged down vehicle sales.

Liddell, who came to GM at the beginning of the year from Microsoft Corp., wouldn't say whether GM will make money in the first quarter, but said there's a good chance the company will make a profit in 2010 based on encouraging first-quarter sales and production. GM plans to release first-quarter results next month.

"I think there is a danger of overpromising and underdelivering," he said. "When we put the numbers on the board, we will come out and tell you about them."

GM, which remains the largest car company by sales in the U.S., saw a slight gain in U.S. market share in the first three months of this year compared to a year ago. Sales of some of its new crossovers, including the Chevrolet Traverse and Equinox and GMC Acadia and Terrain, have been particularly strong. Worldwide production rose to 1.9 million vehicles in the fourth quarter, up from 1.6 million in the same quarter in 2008.

But rivals are nipping at its heels. Ford Motor Co., which didn't take government aid and reported a $2.7 billion profit for 2009, outsold GM in February for the first time in a dozen years. Toyota Motor Corp. came close to outselling GM last month when it used heavy incentives to lure buyers after a series of safety recalls.

Liddell said Toyota's incentives, which GM had to match, will have some impact on profits. But said GM is making cuts elsewhere so it won't have to rely so heavily on U.S. sales. Automakers are predicting a modest recovery in U.S. sales to around 11.5 million vehicles this year. That's about 1 million more than in 2009, when the recession-wracked industry saw its worst sales in nearly 30 years.

"I don't believe we need significant industry improvement to get to profitability," he said.

Things are also on the mend at Chrysler Group LLC, which also went into bankruptcy protection last year and is now managed by Fiat SpA. Chrysler CEO Sergio Marchionne said last week that the automaker has $5 billion in cash on hand and expects to break even this year. Chrysler plans to provide more detailed financial results later this month.

Since July, GM has shed four brands — Pontiac, Saturn, Saab and Hummer — and made a series of management changes and cut thousands of employees. GM had 217,000 employees at the end of 2009, down 11 percent from the prior year.

The results GM reported Wednesday aren't comparable to prior years because the company used fresh-start accounting, which allows companies to completely revalue their assets after bankruptcy protection. GM says it's the largest company ever to go through fresh-start accounting.

[MethodX]

Why dont you guys report some bad news on the jap makers for once?
they deserve it more

[vztrt]

http://www.theage.com.au/business/wo...0408-rsjk.html

GM posts $US4.3-billion loss for post-bankruptcy 2009
April 8, 2010 - 6:46AM

General Motors posted a post-bankruptcy 2009 net loss of $US4.3 billion ($A4.64 billion) on Wednesday but said it hoped to achieve profitability in 2010.

The new GM, which emerged from bankruptcy protection on July 10, achieved global revenues of $US57.5 billion ($A62.01 billion) and ended the year with net cash of $US1 billion ($A1.08 billion).

"As the results for 2009 show, there is still significant work to be done," Chris Liddell, GM vice chairman and chief financial officer said in a statement.

"However, I continue to believe we have a chance of achieving profitability in 2010."

The net loss includes the pre-tax impact of a $US2.6 billion ($A2.8 billion) settlement loss related to the United Auto Workers union retiree medical plan and a $US1.3 billion ($A1.4 billion) foreign currency re-measurement loss.

"We are building the foundation that will allow us to return to public ownership," Liddell said.

GM has completed fresh-start accounting -- which includes determining the fair value of assets and liabilities -- and will file its third-quarter and 2009 results with the Securities and Exchange Commission later on Wednesday.

This is an "important step" in the process of preparing for an initial public stock offering, Liddell said.

"Going public will enable the company to invest in designing, building and selling the world's best vehicles, attract the best people and access the capital markets," the automaker said.

"One of the most important measures in establishing the foundation for going public is the company's ability to return to sustainable profitability."

AFP

[vztrt]

http://www.businessspectator.com.au/...cument&src=rss

GM posts loss, says 2010 profit possible

Reuters

DETROIT - General Motors Co posted a net loss for 2009, but said it was possible to make a profit this year and that it was laying the foundation to return to public ownership.

GM reported a $US4.3 billion 2009 net loss covering the period from its emergence from bankruptcy in July through the end of the year in the automaker's first full account of its new balance sheet as a restructured company.

The automaker said it had repaid $US2.8 billion of its loans from the US Treasury and Export Development Canada by the end of March and planned to repay the remaining $US5.6 billion by June "at the latest."

GM, which received $US50 billion of US taxpayer support for the restructuring, has aimed to move faster to jump-start sales and launch an initial public offering that would allow the US government to reduce its majority stake in the automaker.

GM Chief Financial Officer Chris Liddell said he was "incredibly encouraged" by the company's progress in the first quarter toward a profit in 2010 and said GM would never again find itself in the financial position it experienced before the bankruptcy.

"There is nothing that I've seen in the first quarter - which you'll see in a month's time - that changes my opinion that there is a good chance that we will be profitable this year," Mr Liddell said in a conference call.

After accumulating losses of about $US88 billion from 2005 through the first quarter of 2009, GM's predecessor company fell into a government-supported bankruptcy. The US Treasury currently holds a stake of more than 60 per cent in the new GM.

The US Treasury expects GM eventually to be strong enough to attract sufficient investment and return to profitability. It had no comment on GM's financial statement on Wednesday.

"I think they've got a modest to good chance of becoming profitable in one of the quarters this year," said Mike Boudreau, of the turnaround firm O'Keefe & Associates, citing improvements in the economy and reduced structural costs.

In the results released on Wednesday, GM said its losses from July to the end of 2009 included a $US2.6 billion pretax loss related to a United Auto Workers union retiree healthcare program and $US1.3 billion for foreign currency adjustments.

For the fourth quarter, GM reported a $US3.4 billion net loss and revenue of $US32.3 billion.

GM ended 2009 with $US36.2 billion in cash, compared with $US14.2 billion at the end of 2008.

The restructuring helped the new GM eliminate debt and build its cash, but the automaker's sales overall remain under pressure after its elimination of unprofitable brands.

GM is shutting down the Pontiac, Saturn and Hummer brands and has sold the Swedish Saab brand to Spyker Cars .

The automaker's US sales were up 17 per cent in the first quarter from a year earlier when the industry was hitting its lowest levels since the early 1980s and GM was sliding toward bankruptcy.

However, GM's US market share of 18.7 per cent in the first quarter was down from about 20 per cent for all of 2009, a year in which it lost 2.4 percentage points of US share.

Chief executive Ed Whitacre, who replaced CEO Fritz Henderson in December, has shaken up senior management including its sales and marketing teams in recent months to push for a faster turnaround.

Liddell said GM did not need US auto industry sales to increase significantly in 2010 from last year for the company to be profitable this year.

US auto industry sales fell to about 10.4 million vehicles in 2009, the worst result since the early 1980s. Most industry experts expect sales to increase to a range of 11.5 million vehicles to 12.5 million in 2010.

[vztrt]

http://www.autoblog.com/2010/04/07/w...f-4-3-billion/

Write-downs lead to GM loss of $4.3 billion

by Zach Bowman (RSS feed) on Apr 7th 2010 at 11:40AM

General Motors has just announced it has completed fresh-start accounting as part of its quest to return to public ownership, and the numbers don't exactly look good. GM says that it will announce a $4.3 billion loss for the fourth-quarter of 2009.

Despite relatively strong sales last year, the company had to pay out two large lumps of cash. First, $2.6 billion went to a UAW retiree medical plan. Another $1.6 billion went out the door thanks to "foreign currency re-measurement loss." Despite the daunting figures, GM still says it's confident the company can get back on its feet and start operating at a profit by the end of this year. Given the fact that the company is still aiming to return the large majority of its US Treasury and Export Development Canada loans, getting The General back on its feet may be easier said than done. Official press release after the jump.

[Source: General Motors]

[XRtowcar]

Originally Posted by MethodX

Why dont you guys report some bad news on the jap makers for once?
they deserve it more

http://www.fordforums.com.au/showthr...ht=toyota+loss

I guess GM will have high restructuring costs until they get rid of the debt producing parts of there business.
Hope they can get on top of it soon.

[mik]

Rome was`nt built in a day, i`ll be surprised if Gm still in the poop in a couple of year`s.

[jpd80]

Originally Posted by vztrt

Bankruptcy reduced their enormous debt, but it would seem that poor leadership is just putting them back in their. Will need more info to work out what these muppets are doing.

They still have $17 billion debt that couldn't be shifted in bankruptcy plus the
$45 billion they owe the government plus the $12 billion they owe the UAW.
Yes, I know the latter two are tied up with government and UAW owning parts
of new GM but the way GM is still being run by car guys, they don't seem clueless.

I only hope the US taxpayers and UAW get their money back in the IPO.

[jpd80]

Originally Posted by mik

Rome was`nt built in a day, i`ll be surprised if Gm still in the poop in a couple of year`s.

No, they walked away from most of their debts and kept going
thanks to bankruptcy and the US government.

[bobthebilda]

DETROIT — The pension plans at General Motors and Chrysler are underfunded by a total of $17 billion and could fail if the automakers do not return to profitability, according to a government report released Tuesday.

Both companies need to make large payments into the plans within the next five years — $12.3 billion by G.M. and $2.6 billion by Chrysler — to reach minimum funding levels, according to the report, prepared by the Government Accountability Office

And just think how much worse it would be if they had all their debts on their balance sheet. So they have $36 billion in cash, and $65 billion in debt which equals a net debt of $29 billion. Some companies can probably cope with a $29 billion debt, but not the ones making 4 billion in losses in 6 months. Give it a few years, and no one will be bailing out GM, they will need to bailout the US government first.

[jpd80]

GM thinks all it has to do is just start building the best products in each class
(a line stolen from Alan Mulally) and they think everything else will fall into place.
I'm sorry but business doesn't work that way and pinning your hopes on a
$40,000 glorified Hybrid Cruze (Volt) as the salvation of the company is nuts
especially when competitors are offering alternatives at 60% of that price.

This is not the actions of a company that wants to live.

[bobthebilda]

I guess GM have been able to lop 20% of the cost of the Volt, they have run to the US government and got a $7500 rebate for each Volt sold.

So people can now buy a $20000 car that has a ten year battery lifespan, for $32500, that can travel 60 km's a day, saving $3.50 a day in fuel (or $1277 per year, or $12770 in 10 years). I guess a good marketing dept, could hide the fact that the $270 in net savings over a 10 year period, will more than cover the electricity cost and incovenience, the extra debt the US government will go into, the financing costs on the extra $12500 upfront and more importantly the environmental disaster that will occur when disposing of batteries.

[jpd80]

Yet the Nissan and Ford Focus electric vehicles with 200 mile range will start at around $30,000 attract the same discount as the Volt winding up at $22,500.

Fusion Hybrid is currently about $27,000 and a plug in version will probably cost similar to Focus EV.
Ecoboost 1.6 in Focus is another option and Cruise will have similar with 1.4 DI turbo so GM is
trying to copycat others.

I'm not sure that having one extended range electric vehicle covers the market as well as
a true plug in Hybrid and a true Electric vehicle, i think Ford will have much better results.

[bobthebilda]

The car's 16 kW·h (8.0 kW·h usable) lithium-ion battery pack can be fully charged by plugging the car into a 120-240VAC residential electrical outlet using the provided SAE J1772-compliant[4] charging cord. No external charging station will be required.[5]

This is referred to as Charge Depletion (CD) mode and the Volt is expected to use approximately 25 kW·h/100 mi on the city cycle of the EPA's test while operating in this mode.

The sums would seem to be quite confusing too. Whilst my water heater use is 8 cents a kilowatt hour, all other power outlets are charged at 19 cents per kilowatt hour. Thus at 10Kwh for 40 miles (60kmh), it will cost $1.90. My electricity bill for 4 people (in an all electric house) is $2.70 per day. I wonder how the world will double electricity supply to power all these cars.

[jpd80]

Originally Posted by bobthebilda

The sums would seem to be quite confusing too. Whilst my water heater use is 8 cents a kilowatt hour, all other power outlets are charged at 19 cents per kilowatt hour. Thus at 10Kwh for 40 miles (60kmh), it will cost $1.90. My electricity bill for 4 people (in an all electric house) is $2.70 per day. I wonder how the world will double electricity supply to power all these cars.

40 miles in an efficient car probably costs $3 to $4 in fuel, were paying nearly $24,000 more
up front instead of buying a Cruze just to boast that that we go 40 miles for 8 cents...

[aussie muscle]

the abc had an 'expert' on air yesterday who said GM didn't do all the necessary restructuring they needed to do because they got a govt bail out. he was of the opinion they 'didn't go far enough'. He suggested this will slow their recovery.

Originally Posted by bobthebilda

I wonder how the world will double electricity supply to power all these cars.

exactly. and the electricity grid is already at capacity. if you buy an electric charge car, make sure you charge it overnight during off-peak.

a lot of green movement :monkes:

[vztrt]

http://theage.drive.com.au/motor-new...0408-ru9h.html

GM loses $580 per second
BARRY PARK
April 8, 2010

Think Holden made a jaw-dropping loss last year, running $210 million into the red?

Spare a thought for Holden’s parent, General Motors, then. It has just posted a massive US$4.3 billion ($A4.6 billion) loss for the third quarter of last year. That amounts to some $50 million per day, or around $580 every second.

General Motors Company - the name was changed from General Motors Corporation in July so that the car maker could split off all its underperforming assets and claw its way back from bankruptcy - included a US$2.6 billion settlement loss related to a union retiree medical plan, and a US$1.3 billion loss related to betting the wrong way on foreign currency exchanges with countries including Australia.

Production volumes, disclosed as part of GM’s obligations to trade itself out of bankruptcy and filed with the US Securities and Exchange Commission today, show Australia ranked seventh in terms of car production at the car maker’s foreign subsidiaries and joint ventures during the quarter. The only foreign car-making facilities to produce fewer cars than Holden for the quarter were Argentina, India, Colombia and Venezuela.

Weaker domestic demand and the loss of Holden’s export program to the US, combined with a similar reduction in Korean subsidiary GM Daewoo’s exports, blew a $US3.2 billion hole in General Motors International Operations, the company under which the car maker’s foreign subsidiaries are grouped.

The accounts also reveal the extent to which GM was willing to help Holden remove staff from its payroll. They show that the Australian subsidiary spent a total of US$25 million to shed executives and blue-collar workers, and another US$19 million to pay for the closure of the four-cylinder engine plant at Port Melbourne (Holden now builds V6 engines at Port Melbourne).

GM said it would look at how it could ‘‘utilise’’ Holden’s largest annual loss in recent history in its future accounts. Under Australian tax laws, companies may be able to write off a loss in the years that they turn a profit.

‘‘As the results for 2009 show, there is still significant work to be done,’’ GM vice-chairman Chris Liddell said. ‘‘However, I continue to believe we have a chance of achieving profitability in 2010.’’

The loss came despite revenue for the three-month period totalling $US57 billion.

[Ohio XB]

CEO Ed Whitacre was the head of AT&T, a telecommunications company. He knows about providing service, not manufacturing. I fear his ambitions to merely pay off loans 5 years in advance will teach him how much money one needs to manufacture innovative cars and trucks. I think GM will need that money now, money that is not due for 5 more years. Just think....even if they THINK they have the money now, why not put a couple billion in a savings account, let it earn interest, and then they would have even more "free money" to use to pay towards debt? Of course I am being facetious with the savings account, but why not invest billions to make more money if they don't need it right now? I am not a financial genius but that would seem to make more sense than giving the government money far ahead of schedule....that may be needed by GM next year.



Battery powered Focus has been touted to have a 100 mile range. Also, since Nissan is coming out with their battery powered "Leaf" Ford has announced very competitive pricing for the battery powered Focus. They have not said specifically, just that it will be very competitive among vehicles in it's class.


I've read many reports of the UAW VEBA accounts being chastised by journalists, touting how damaging they are to the Big3 and that the large payments that are coming due to these accounts are slowing down their recovery. What I am NOT reading is that the Big3 proposed the idea of the VEBA accounts to the UAW in order to remove debt from their books. The UAW didn't ask for this but when the idea was proposed by the Big3 it was understood why it was being suggested and agreed that it would be put up to a vote by the membership. The membership agreed to the VEBA's in order to help out the Big3, at their request. Now the UAW gets slammed for having the VEBA's, which they were asked to accept.



Steve

[bobthebilda]

Originally Posted by aussie muscle

exactly. and the electricity grid is already at capacity. if you buy an electric charge car, make sure you charge it overnight during off-peak.
a lot of green movement :monkes:

Well I am sure there are going to be alot of summer nights, with air conditioners running, that there still wont be capacity to charge electric cars.

And with all the coal fired power stations that have to be built to charge these electric cars up, our summer nights just might extend into autumn and spring.

And in all seriousness, with greater urbanisation, how many apartment blocks have an electricity outlets near the tenants parking spot.