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Car Forum / GMC Cars / December 2005GM should give a 10 year/100,000 mile powertrain warranty for all new vehicles and those sold in the past 9 years
The intake manifold problems of most of GM's modern V-6 engines are but one example of poor engineering and/or poor manufacturing control which have caused hundreds of thousands of customers to be burned. These are not used car hand-me-downs, but people who put out their hard earned money and got screwed. If GM were serious about treating customers right it would start with a 10 year/100,000 mile powertrain warranty. Why doesn't GM do this? If their stuff is good, then a vehicle maintained by-the-book should not have any powertrain failures in 100,000 miles. This should also be made retroactive to all GM vehicles sold in the past 9 years. This would be money well spent on building the brand image. Much more sensible than throwing discounts down the rat hole of marketing foolishness. If GM were building top quality vehicles then this extra warranty would cost almost nothing. Increased rebates and incentives destroy resale values of previously sold vehicles. Extend the warranty and the resale value of previously sold vehicles actually goes up. John Trolling again? The intake gasket problem has been solved. Why would GM or any other auto maker give more warrantee than the others? Kia & the asian upstarts need to to lure unwary customers to their junk. > Trolling again? The intake gasket problem has been solved. Why would GM > or any other auto maker give more warrantee than the others? > > Kia & the asian upstarts need to to lure unwary customers to their junk. Hmmm, first I am accused of never providing a realistic suggestion, then I am a "troll" for doing so. Make up your mind Mr/Ms no name. If GM makes well built products then what possible reason could there be not to give a long warranty? If the product is well engineered and well built then there is no reason for the powertrain to fail before 100,000 miles when a customer maintains it by-the-book. GM would need to require that the customer document proper maintenance. As far as the intake gasket problem being solved, how do you know? It hit my three year old Olsmobile which is powered by a 3.4l V-6 engine GM has had one version or another of in production for well over a decade. What are your suggestions for GM to pull out of the sales and financial tailspin it is clearly in? More rebates? More Red Tag Sales Events? John This is an excellent suggestion. I don't think GM would loose much on this deal...at least it would be far less that $3K-$6K per unit that they loose now with these crazy profit-busting sales. And those costs would come over several years, not up front. However, I still personally wouldn't buy a GM vehicle again. I like some of their models, when the lights are off and you can actually see them. But all of them are most annoying "lights-in-your-face-all-the-time" cars. I just don't want to even drive such a annoying vehicle. > This is an excellent suggestion. I don't think GM would loose much on this > deal...at least it would be far less that $3K-$6K per unit that they loose > now with these crazy profit-busting sales. And those costs would come over > several years, not up front. What a surprise that you agree with Horner! Neither one of you would appear to have even a basic knowledge of the economics of Horner's suggestion. And together, your combined IQ's would fall well short of your respective shoe sizes! > However, I still personally wouldn't buy a GM vehicle again. Then why do you remain in this News Group? Take a look up above James - it say's alt.autos.gm up there! *lol* Quit tormenting us and troll on over the the News Group whose vehicles you will be buying in the future. My gosh, how you moan and whine! > I like some of > their models, when the lights are off and you can actually see them. But > all of them are most annoying "lights-in-your-face-all-the-time" cars. I > just don't want to even drive such a annoying vehicle. I'd pay a surcharge to GM to keep producing their "lights-in-your-face-all-the-time" cars, if it would drive you and Horner out of the News Group. The only nice thing about reading whiney posts from you and Horner is that I know that the rest of day has to be better! Your "woe-is-me" posts make me realize how lucky I am, not be be a malcontent like you and Horner! >> This is an excellent suggestion. I don't think GM would loose much on >> this deal...at least it would be far less that $3K-$6K per unit that they [quoted text clipped - 5 lines] > suggestion. And together, your combined IQ's would fall well short of your > respective shoe sizes! Chrysler has been doing it for years. And, at the moment, their sales have been up for the year as have their profits. Deferring costs is a viable business alternative. Certaintly better than taking the hit up front as happens with cutting the sales prices to bare-bones. >> However, I still personally wouldn't buy a GM vehicle again. > > Then why do you remain in this News Group? Take a look up above James - it > say's alt.autos.gm up there! *lol* I come from a decades-long GM family...both sides. I'd like to end the estrangement at some future point. The problem is, only one side is really trying. > Quit tormenting us and troll on over the the News Group whose vehicles you > will be buying in the future. Which *could be a GM*. I haven't written them off completely. ;-) > My gosh, how you moan and whine! Except I'm not alone. If one wants to sell cars, one needs to listen to the customer base. Especially when there is no rational reason not to and most of the competition is listening on the subject matter and responded appropriately to them. >> I like some of their models, when the lights are off and you can actually >> see them. But all of them are most annoying [quoted text clipped - 4 lines] > "lights-in-your-face-all-the-time" cars, if it would drive you and Horner > out of the News Group. Poor reason. But if you have the money, knock yourself out. The problem is, that attitude to the customer won't sell cars. > The only nice thing about reading whiney posts from you and Horner is that > I know that the rest of day has to be better! Your "woe-is-me" posts make > me realize how lucky I am, not be be a malcontent like you and Horner! I'm perfectly fine, thank you. Not sure why you want to make this personal though. The topic of the op was to post ideas on how to improve sales. You disagree with the ideas. Not a problem for me. I'm certainly not going to claim a low IQ on your part for it. Now, back to the topic. What are your ideas (other than alienating customers to go elsewhere, that is)? > Trolling again? The intake gasket problem has been solved. Why would GM > or any other auto maker give more warrantee than the others? > > Kia & the asian upstarts need to to lure unwary customers to their junk. Why do you say the intake gasket problem has been solved? What has been changed in the basic design of the GM 60 degree engine? > Trolling again? The intake gasket problem has been solved. Why would GM > or any other auto maker give more warrantee than the others? > > Kia & the asian upstarts need to to lure unwary customers to their junk. Horner is right..I got burned myself with the faulty intake gasket, and thats why I decided not to buy the 3.9 G6 coupe cuz it uses that same basic design v6 that has been failing the last 10 to 15 years because of a poor design. Now if GM thinks they have their sh.t together with the new engine then warrantee it for at least 8 years then I will bite. Otherwise my GM days may be over. Then again I dont care if they put an airplane engine in the G6 sedan cuz that thing is so ugly they would have to give it to me. > Horner is right..I got burned myself ... Muhammed Mustafo Goldstein Jr! Now there's a good Irish name! *lol* Well that's good enough for me Jr! If you got burned, Horner must be right! You have just joined the exclusive "Bitchers, Whiners, Moaners and Losers Club"! You join John Horner and James C, Reeves as one of only 3 members! *lol* >> Horner is right..I got burned myself ... > [quoted text clipped - 3 lines] > Club"! You join John Horner and James C, Reeves as one of only 3 members! > *lol* My guess the number is higher than three. Perhaps four. ;-) Actually, the family has had very good experience with GM vehicles over the past 50 years. I had one that I drove close to 200K miles and ran fine when I traded it. My parents got very good service out of their GM vehicles. In fact, the 1984 LeSabre that my father owned lasted well over 200K miles, then sold it to a co-worker that drove it 4-5 years longer (don't know the final mileage). GM makes a good product, generally speaking. They should be fine standing behind the vehicles with an additional warranty idea to attract buyers. I can't believe it would cost them anywhere near the $3K per vehicle on average it costs them now to discount so heavily. And even if it did, those costs would be years out (in business terms...deferred!) >Actually, the family has had very good experience with GM vehicles over the >past 50 years. I had one that I drove close to 200K miles and ran fine when >I traded it. My parents got very good service out of their GM vehicles. In >fact, the 1984 LeSabre that my father owned lasted well over 200K miles, >then sold it to a co-worker that drove it 4-5 years longer (don't know the >final mileage). I just don't understand it. I've owned several GM autos over the years. I've had pain-in-the-a.s problems with all of them. Yet I talk to guys who say; Drove my Chevy 200K miles, and never even changed the oil or spark plugs. Are these like fishing stories ? BTW; I owned a Chevette too. ( Shove-It ) Another case where GM spent more $$ on advertising than on engine/drivetrain reliability. <rj> "" wrote: > >Actually, the family has had very good experience with GM vehicles over the > >past 50 years. I had one that I drove close to 200K miles and ran fine when [quoted text clipped - 12 lines] > > Are these like fishing stories ? Just traded in my 99 Century for an 05 Century and I had about 150K km on it and I never did change the plugs. As a mater of fact the reason I traded it was because I sent my wife in to have the plugs changed and she phoned back saying they wanted $1000 to change the plugs and replace the wires. There was absolutely nothing wrong with the car. > BTW; > I owned a Chevette too. ( Shove-It ) > Another case where GM spent more $$ on advertising > than on engine/drivetrain reliability. > > <rj> > BTW; > I owned a Chevette too. ( Shove-It ) > Another case where GM spent more $$ on advertising > than on engine/drivetrain reliability. > > <rj> The wife owned a '78 Chevette when we got married. That one *was* a dog. But what would one expect from a $3K car. It was built as a "throw-away". > Trolling again? The intake gasket problem has been solved. Why would GM > or any other auto maker give more warrantee than the others? > > Kia & the asian upstarts need to to lure unwary customers to their junk. The facts are 90% of people with a 3.1, 3.4 or 3.8 will have an expensive intake gasket failure before reaching 100k miles. The rest will have the failure before 200k miles unless extremely lucky. Now why would I buy the new 3.9 v6 when GM let the problem with the previous engines go on for 10 or 15 years knowing of the problem hitting customers fo $800 a pop for the repairs. The 3.9 may well have the same problem. Sounds like gauranteed money for the GM shops, now its come back to bite them in the a.s. I was a hard core GM fan growing up as a kid in the 60s and 70s admiring everything from a 57 chevy to a 70 454 Chevelle, but lets face it those days are over and GM screwed itself. >>Trolling again? The intake gasket problem has been solved. Like it was solved at least twice before, only to keep on happening? Perhaps they got it right this time....time will tell. > Trolling again? The intake gasket problem has been solved. Why would GM > or any other auto maker give more warrantee than the others? > > Kia & the asian upstarts need to to lure unwary customers to their junk. You forgot Chrysler. Chrysler covers 7/70 on an 03 Stratus and 04 Sebring the Wife and I have. I had a 03 Malibu...but it only came with a 3/36 warranty. I dumped it before it could get the gasket and piston slap problems. It was a POS car anyway in comparison to the cars we have now. At least the sludge problems of the 2.7 Chrysler engine can be owner mitigated by using Synthetic oil. > You forgot Chrysler. There are many reasons that we'd all like to forget Chrysler! PT Cruiser, Prowler, Viper, Stratus, Sebring, etc., etc., etc. > Chrysler covers 7/70 on an 03 Stratus and 04 Sebring > the Wife and I have. There's a ringing endorsement, if ever I heard one! LMAO! I might have known that you'd be driving some pussified anemic little wussmobiles! Those two vehicles have no style, no class and no power! Not unlike yourself! > I had a 03 Malibu...but it only came with a 3/36 > warranty. I dumped it before it could get the gasket and piston slap > problems. Which like millions of others, you may never have had problems with. Gawd, you sound like an hysterical little girl! You see ghosts behind every door! > It was a POS car anyway in comparison to the cars we have now. Now there's a real slam! James those two little wussmobiles you now have will depreciate far quicker and deeper than the Malibu. And they are possibly the ugliest cars to come out of Detroit since the AMC Pacer! > At least the sludge problems of the 2.7 Chrysler engine can be owner > mitigated by using Synthetic oil. That sounds like wonderful quality you bought there James! You are one odd duck! > > You forgot Chrysler. > > There are many reasons that we'd all like to forget Chrysler! PT Cruiser, > Prowler, Viper, Stratus, Sebring, etc., etc., etc. Those products exist and many Chrysler models sell, especially the 300C these days (not sure why, they're ugly as hell). But why so seemingly bothered by their existence? >> Chrysler covers 7/70 on an 03 Stratus and 04 Sebring the Wife and I have. > > There's a ringing endorsement, if ever I heard one! Their sales numbers have been improving over the past year or two. And they are making money (at least for now). So, results like that say yes those ideas the Op has put forth are worth looking at before dismissing "out-of-hand". > LMAO! I might have known that you'd be driving some pussified anemic > little wussmobiles! Those two vehicles have no style, no class and no > power! Not unlike yourself! Can't stick to the subject matter at hand I see. <sigh> I'm not sure what your opinion of me personally or with the particular vehicles I referenced has to do with the topic. Neither provide any ideas on how to sell more GM vehicles. However, you may want to check the performance numbers and general statistics in any car rag...they are virtually identical in that year (2003). So in the final analysis, neither product has any glaring advantage over the other based on the raw statistics. Style and design are largely personal taste. GM makes some nice looking and desirable cars as far as I'm concerned. (I like the style of the 2003 Malibu). Some disagree (I just don't happen to disagree in this particular area). >> I had a 03 Malibu...but it only came with a 3/36 warranty. I dumped it >> before it could get the gasket and piston slap problems. > > Which like millions of others, you may never have had problems with. Gawd, > you sound like an hysterical little girl! You see ghosts behind every > door! Diversion noted...again. >> It was a POS car anyway in comparison to the cars we have now. > > Now there's a real slam! James those two little wussmobiles you now have > will depreciate far quicker and deeper than the Malibu. The cars are comparably priced (see www.carmax.com) or (www.edmunds.com). Fact is, *ALL* US made cars depreciate too quickly. Doesn't matter if it's GM, Ford, Chrysler. The Malibu and Stratus are no exception. > And they are possibly the ugliest cars to come out of Detroit since the > AMC Pacer! Opinion counts for just that..opinion. Some poeple liked the Pacer (I wasn't one of them). So what? I don't see the point on how Chryslers you think are ugly will help sell more GM's. Unless you can explain the rationale to your statement. I will say that neither vehicle had been in the shop for warranty work during their first year. I can't say the same for the Malibu, I had..and I only had it for 9-months. The worst problem was that the body seams were not sealed. the car leaked like a seive when ever it rained. It took the dealer 5-days to fix that little problem and repair the damage from the water. My experience with the Malibu is not likely typical. However, the car was simply too much bother to keep...I'm sure you can appreciate that. I doubt many people would keep a car under the circumstances. >> At least the sludge problems of the 2.7 Chrysler engine can be owner >> mitigated by using Synthetic oil. > > That sounds like wonderful quality you bought there James! You are one odd > duck! What is so odd about accepting a product fault that has a easy owner-applied solution? It's hard to claim (as you just did) that I am claiming product quality here since I had disclosed a fault in the product, don't ya think? Chrysler has it's problems, no question about it. By the way, the topic is to discuss ideas on how GM can sell more cars. My example was to demonstrate that some of GM's competitors (Chrysler in this case) are offering increased warranty coverage as an incentive (and that supports the Op's suggestion). Now so far, not a single idea on the topic from you. Zip. Nada. Do you have any? Or is your idea to keep doing what isn't working? Or do you prefer to simply call people names instead? How productive is that? > The intake manifold problems of most of GM's modern V-6 engines are but > one example of poor engineering and/or poor manufacturing control which [quoted text clipped - 18 lines] > > John Unfortunately John, GM can't do that as they would go broke even sooner. Wagner prefers to administrate a slow demise where the pain can be felt by the customers, employees and the public at large. Eventually, if they need to, they will try to buy new customers with longer warranties. They already spent your money and more so they won't be giving any back. PS. GM tried what you are suggesting years ago with their 8V71 diesel engines that were failing cylinder kits at early mileage. They issued one FIX after another. They bought back engines and overhauled others up to 300,000 miles. Customers soaked it all up and went to Cummins for their next spec. The question was " if " GM made a quality car. They don't and would go broke much sooner with a 100k mile warranty. I'm done with them and their cars. Bob >> The intake manifold problems of most of GM's modern V-6 engines are but >> one example of poor engineering and/or poor manufacturing control which [quoted text clipped - 31 lines] > up to 300,000 miles. Customers soaked it all up and went to Cummins for > their next spec. > Unfortunately John, GM can't do that as they would go broke even > sooner. Wagner prefers to administrate a slow demise where the pain can > be felt by the customers, employees and the public at large. > Eventually, if they need to, they will try to buy new customers with > longer warranties. They already spent your money and more so they won't > be giving any back. You are probably right :(. GM's management and union leaders seem to have completely missed the lessons of the demise of the once powerful British-based auto industry which self destructed in the 1960-1980 period. There is now not a single remaining UK based automotive company of any significant size. Even the niche players like Rolls-Royce and Lotus are now owned by other companies (Germany's BMW for Rolls, Malaysia's Proton for Lotus). General Motors = British Leyland ?????? John >snip > [quoted text clipped - 3 lines] > have any powertrain failures in 100,000 miles. This should also be made > retroactive to all GM vehicles sold in the past 9 years. John, you are such a doorknob! Why not a 20 year/200,000 mile powertrain warranty? If their stuff is good, then using your logic, a vehicle maintained by-the-book should not have any powertrain failures in 200,000 miles. Where does one draw the line of practicality? John, the answer to this question is held in assessing the odds of component failure. i.e. the longer the time period, the greater the risk of component failure. Not to mention the impact on powertrains of the varying driving styles from person-to-person. John, wake up and smell the burning clutch! >>snip >> [quoted text clipped - 12 lines] > mention the impact on powertrains of the varying driving styles from > person-to-person. John, wake up and smell the burning clutch! You answered your own question. GM simply needs to chart out where the line of negative return is. If it is at 3/36, then they *are* building junk. My bet is that GM could go 6/60 with minimal additional cost and that warranty would boost sales significantly. > >>snip > >> [quoted text clipped - 19 lines] > > \ I dont think GM believes in there product enuff to do dat. >> \ > I dont think GM believes in there product enuff to do dat. I'm not so sure about that. I think most of the product lines will stand up well. I doubt seriously that there is a significant failure rate below 60K miles and 5-6 years that it would cost much. But, GM has the numbers to know for sure. >>John, you are such a doorknob! Why not a 20 year/200,000 mile powertrain >>warranty? If their stuff is good, then using your logic, a vehicle [quoted text clipped - 9 lines] > bet is that GM could go 6/60 with minimal additional cost and that warranty > would boost sales significantly. But James, what about the 10 years forward, 9 years back warranty recommended by Horner? If I may quote your ealier response: >> This is an excellent suggestion. " Now you say 6 years. James the only thing consistent about you is your inconsistency. In one post, you say "However, I still personally wouldn't buy a GM vehicle again." Now tonight you say: "Which *could be a GM*. I haven't written them off completely. ;-) " Well which is it James? You can't suck and blow at the same time. ;-) James, with all due respect, you are all over the map on this issue. Just go back and see the contradictions in your own posts. What's that old saying James? "It's better to remain quiet and appear stupid, than to open your mouth and remove all doubt." Think before you speak James. That's all I'm saying here. 'Nuff Said! >>>John, you are such a doorknob! Why not a 20 year/200,000 mile powertrain >>>warranty? If their stuff is good, then using your logic, a vehicle [quoted text clipped - 12 lines] > But James, what about the 10 years forward, 9 years back warranty > recommended by Horner? If I may quote your ealier response: I personally don't think the retroactive component of the idea would help to sell cars. However, it is worth studying to know for sure. > >> This is an excellent suggestion. " The idea, yes. The terms are up for study/debate. > Now you say 6 years. James the only thing consistent about you is your > inconsistency. If 6-years is where the ROI charts out, sure. It could be ROI is 4 years. It could be that it's 10 years. Some research would be required to know where the financial line crosses. The Op has no idea. Neither do I. The idea to take a look at enhancing the wrranty is a good one though. > In one post, you say "However, I still personally wouldn't buy a GM > vehicle again." I don't remember saying the word "again". If I did, it was a mistype. Place the period after the word "vehicle". The sentence will then be present tense, not future tense. Does that help? > Now tonight you say: "Which *could be a GM*. I haven't written them off > completely. ;-) " Well which is it James? You can't suck and blow at the > same time. ;-) If GM changes some things (not worth drudging up the voluminous list here again), I'd buy one in a second! Seems like a simple concept to grasp. > James, with all due respect, you are all over the map on this issue. Just > go back and see the contradictions in your own posts. What's that old > saying James? "It's better to remain quiet and appear stupid, than to open > your mouth and remove all doubt." Think before you speak James. That's all > I'm saying here. 'Nuff Said! Perhaps these clarifications help. :-) >> snip >> [quoted text clipped - 5 lines] > > John, you are such a doorknob! People who do not have good arguments always resort to insult and other forms of personal attack. I guess that in your world GM is doing everything right and has nothing to worry about. Enjoy your world. John >>> snip >>> [quoted text clipped - 21 lines] > > John What a wussy copout John! If you find it insulting that I criticize your ludicrous suggestion, you have to grow thicker skin. I find it ironic that the lack of common sense displayed by your silly recommendation is the same lack of common sense that got GM into trouble in the first place! How's that for irony? In my world, GM is indeed doing a lot of things right. The recent U.S./Canada announcement was a major step for them. Only time will tell the full story. As someone said in an earlier post, GM still has the financial wherewithall to get through these tough times, now that major cost-cutting plans are in place and being executed. For my money, the GM execs are a lot brighter than you and Mr. Reeves. They have gotten through tough times before and GM will surely be in business when you and I are long gone! It's too easy to use that tired excuse "It's management's fault that the company has problems." That's another wussy copout John. You could say that every time a company fails. With a major, complex entity like GM, there are far too many influencing factors to pin the sole blame on management. Management don't have reliable crystal balls John that tell them just how effectively foreign competition is going to impact them. Nor can they forcast how many short-sighted Americans are going to buy imported cars for the short-term financial gain. Many detrimental factors are well beyond management control John. Open your eyes and mind John. There is none so blind as he who will not see! >> John Horner wrote: >> People who do not have good arguments always resort to insult and [quoted text clipped - 9 lines] > same lack of common sense that got GM into trouble in the first place! > How's that for irony? Although I'm sure John can speak for himslef, I don't think he was referring to the fact that you disagree with the idea. It is certaintly fine and respectable that you don't think the idea has merit (based on what basis of statistical/research, I have no idea). I believe he was referring to the use of tems like "wussy" and statements like "I bet this person is smarter than you are..." types of responses. Which, in the end, is more of a reflection on the person using such forms of dialog in a civil discussion than it is a reflection on the person it was aimed at. > In my world, GM is indeed doing a lot of things right. There is a fair amount of truth to the statement that GM is doing a lot of things right. No question. However, the results in the real world (which is apparently a different world than your world, it seems) is that their business is failing and loosing market share by the minute. They have to do better in the areas where they aren't doing things right (or as well as they could). > The recent U.S./Canada announcement was a major step for them. Only time > will tell the full story. As someone said in an earlier post, GM still has > the financial wherewithall to get through these tough times, now that > major cost-cutting plans are in place and being executed. And we are all with you in the hopes that you are right, I'm sure. However, that "announcement" only addresses the "cost" side of the balance sheet. They still need to address the declining "revenue" side of the balance sheet. The ideal company business model is to see *both* revenues and costs rising (i.e. growth). Management of a successful company will focus on what it takes to enhance the revenue side. Announcing "cost cuts" is, in business terms, admitting a declining business at best and defeat at worst. Hardly gives one the "warm-and-fuzzies" (Management in a position of being backed up against the wall right now by their own doing). > For my money, the GM execs are a lot brighter than you and Mr. Reeves. That certaintly could be the case. Perhaps it is likely the case (I don't know Mr. Horner). However that isn't relivant and isn't the point. Those execs you speak of have racked up $278 billion (yes billion!) in debt on top of a "profit" of negative $6 billion a year with just a little over 18-20 billion in cash. Do you have any idea how much money it takes to service the interest on a debt of $278 billion? Basically they have 2-3 years on the outside to make something drastic happen. With their corporate bond rating of "junk", the cost of money for GM is very high compared to their competitors. Another competitive disadvantage to add to the list. > They have gotten through tough times before and GM will surely be in > business when you and I are long gone! I sure hope so, for my grandkids sake! There are some very respectable financial people that don't seem as sure as you do. Also remember the common investment advise! Performance history does not predict future performance. In other words, what transpired before had no relivance to what will transpire in the future. The fact that GM recovered before means nothing to the current situation. Each situation is different. > It's too easy to use that tired excuse "It's management's fault that the > company has problems." Who's fault is it? > That's another wussy copout John. Since when is it a copout for management to accept blame and do something about it? To say it's someone elses fault is the copout. > You could say that every time a company fails. With a major, complex > entity like GM, there are far too many influencing factors to pin the sole > blame on management. Of course! That *is* who is to blame. Copout and excuses noted. > Management don't have reliable crystal balls John that tell them just how > effectively foreign competition is going to impact them. No, but they have (or should have) technology like data warehouse systems and management reports that would tell them exactly these things. It isn't ricket science. If they don't have those tools, its their fault they don't (again). > Nor can they forcast how many short-sighted Americans are going to buy > imported cars for the short-term financial gain. Many detrimental factors > are well beyond management control John. Open your eyes and mind John. > There is none so blind as he who will not see! Copout noted. So, instead of doing some research and running some numbers to see for sure if looking into an idea like this might help to increase sales, management should just poo-poo it out-of-hand like you are and sit back and do nothing else except close plants and fire people? I'm not buying your version of a plan "dad". Remember, the revenue side of the balance sheet needs help and needs it badly. Now, I'll ask again. What alternative ideas do you have that might increase sales? o John has put forth the idea to look at increasing warranty coverage. o I say turn the damn annoying daytime lights off if a customer wants them off (among other things) o What do you say? >>>John Horner wrote: >>>People who do not have good arguments always resort to insult and [quoted text clipped - 18 lines] > reflection on the person using such forms of dialog in a civil discussion > than it is a reflection on the person it was aimed at. Another wussy copout! I find it extremely interesting that you "what basis of statistical/research" I base my opinions, when you clearly continue to advocate that we "study" the matter! *lol >>In my world, GM is indeed doing a lot of things right. > [quoted text clipped - 14 lines] > They still need to address the declining "revenue" side of the balance > sheet. James, there you go talking about something you have little knowledge of! Did you not look at the link that Stingray provided to GM's SEC filings? For the 9 months ended Sept.30/05, Revenue held up pretty well year over year. Consolidated Revenue for 2005 was $141,424M (Million) vs. $141,983M in 2004. That's a decrease year to year of only $ 559M or 3.9/1000 of 1 % James! Does that sound earth shattering to you and your financial advisors? > The ideal company business model is to see *both* revenues and costs > rising (i.e. growth). Management of a successful company will focus on what [quoted text clipped - 6 lines] > > That certaintly could be the case. Perhaps it is likely the case LMAO!!! James, don't fool yourself! It is definitely the case! >(I don't > know Mr. Horner). However that isn't relivant and isn't the point. Those [quoted text clipped - 5 lines] > rating of "junk", the cost of money for GM is very high compared to their > competitors. Another competitive disadvantage to add to the list. James, let it be clear that GM borrows money a lot cheaper than you! You continue to use erroneous financial figures, which Stingray already took you to task on, in his response to your post of November 29th under the subject entitled "GM Hedge Funds". Stingray proved that all your numbers were wrong James! Let me repost his message for you, a message incidentally that you failed to respond to! Please read it this time! Here it is: _____________________________________________________________________________ "StingRay" <StingRay@Vette.com> wrote in message news:jridndPmOOUtkxDeRVn-pQ "James C. Reeves" <jcnospam@nospam.com> wrote in message news:NPidnbjATYWtZRHenZ2dnUVZ_sKdnZ2d@comcast.com... > Must be since most of the financial guys that study the books of companies > are quite worried. Probably more a denial thing, actually. GM isn't > beyond hope. All they need to do is figure out how to pay off ~278 > billion dollars in debt with the ~18 billion dollars they have in the bank > while loosing an additional 6 billion dollars a year. Should be a piece > of cake! ;-) James, I am a "financial guy" and I'm puzzled by your debt figure, as well as your 18 billion dollar figure. I just visited GM's site and pulled off their SEC Filings. If you'd like to see them, they are at this address: http://www.gm.com/company/investor_information/sec/ You will note therein that GM had "Total Debt" of $ 446 Billion at that time. But the most important figure is the company's "Current Debt", which was recorded at $ 74.7Billion. Now if you take a look at the Assets, you will see "Current Assets" of $ 53.8Billion. To this, you have to add the Current Assets of Financing and Insurance Operations, which look like this: Cash & Cash Equivalents $ 21.4Billion Investments in Securities 16.5Billion Finance Receivables - Net 177.0Billion Loans Held For Sale 17.6Billion Assets Held For Sale 18.7Billion ------------------- Current Assets of $ 251.2Billion Financing & Ins. Ops. Now James, if we add this figure to the $ 53.8Billion figure above, we find that as at September 30, 2005, GM had Total Current Assets of $ 305Billion, which would quite easily handle their Current Debt, which was $ 74.7 Billion. I fail to see the liquidity crisis you seem to allude to. Even if GM had a temporary liquidity problem at some point, they could raise Billions of dollars quite quickly by leveraging up some of their Fixed Assets, which I'm sure would have substantial value over Book Value. So let's not get out the shovels to bury GM just yet. Her demise is highly exaggerated and the funeral wake is premature. __________________________________________________________________________ James, you continue to use those financial numbers that you apparently dreamed up. As Stingray pointed out, you are way off=base! >>They have gotten through tough times before and GM will surely be in >>business when you and I are long gone! > > I sure hope so, for my grandkids sake! There are some very respectable > financial people that don't seem as sure as you do. Respected by whom James? You and John Horner? Name one well-known respected financial person James. Or did you simply jump on the bandwagon of the uninformed? Oh right, that's exactly what you did, as demonstrated by your incredibly uninformed figures for debt and bank balance! *lol* > Also remember the > common investment advise! Performance history does not predict future > performance. In other words, what transpired before had no relivance to > what will transpire in the future. The fact that GM recovered before means > nothing to the current situation. Each situation is different. Ah, you're finally catching on! >>It's too easy to use that tired excuse "It's management's fault that the >>company has problems." > > Who's fault is it? Yours for buying imports! Unions for negotiating too well! The U.S. government for not ensuring a level playing field before allowing a major influx of imports! GM management in some cases! GM employees who drive imports to work every day! People like you who seemingly "make up" completely false financial numbers and then publish them! (By the way, where did you get those numbers?) >>That's another wussy copout John. > > Since when is it a copout for management to accept blame and do something > about it? To say it's someone elses fault is the copout. Read my comment again James! Come on James - you can do it - put it all together! You appear to have missed it! Let me quote: "It's too easy to use that tired excuse "It's management's fault that the company has problems. That's another wussy copout John. You could say that every time a company fails. With a major, complex entity like GM, there are far too many influencing factors to pin the sole blame on management. Management don't have reliable crystal balls John that tell them just how effectively foreign competition is going to impact them. Nor can they forcast how many short-sighted Americans are going to buy imported cars for the short-term financial gain. Many detrimental factors are well beyond management control John. Open your eyes and mind John. There is none so blind as he who will not see! " >>You could say that every time a company fails. With a major, complex >>entity like GM, there are far too many influencing factors to pin the sole >>blame on management. > > Of course! That *is* who is to blame. Copout and excuses noted. You are too thick to be believed James! There are so many forms of risk that effect a company like GM James. Do you know what "sovereign risk" is James? It's a major factor for GM. Look it up! Do you know what "currency risk" is James? It's another major factor for GM. Look it up James! Both of these are risks beyond the ability of GM to control directly, although they can do some currency hedges (risky business in itself) to mitigate currency risk. There are literally hundreds of risks beyond the direct control of management in a mutinational company. >>Management don't have reliable crystal balls John that tell them just how >>effectively foreign competition is going to impact them. [quoted text clipped - 3 lines] > ricket science. If they don't have those tools, its their fault they don't > (again). Well, it may not be "ricket science" but it's obviously beyond your comprehension! That previous paragraph was complete gobbledygook James. It makes no sense whatsoever! >>Nor can they forcast how many short-sighted Americans are going to buy >>imported cars for the short-term financial gain. Many detrimental factors >>are well beyond management control John. Open your eyes and mind John. >>There is none so blind as he who will not see! > > Copout noted. Indeed! > So, instead of doing some research and running some numbers to see for sure > if looking into an idea like this might help to increase sales, management > should just poo-poo it out-of-hand like you are and sit back and do nothing > else except close plants and fire people? I'm not buying your version of a > plan "dad". Remember, the revenue side of the balance sheet needs help and > needs it badly. You have just proven once again that you ignored Stingray's response to your post. He did the real research James. You're just blowing smoke. I challenge you to respond to Stingray. ;-) > Now, I'll ask again. What alternative ideas do you have that might increase > sales? Revenue looks pretty good year to year James. You'd better look at the real numbers at http://www.gm.com/company/investor_information/sec/ What numbers are you looking at? Ha, Ha! > o John has put forth the idea to look at increasing > warranty coverage. > o I say turn the damn annoying daytime lights off if a > customer wants them off (among other things) > o What do you say? I say that you sound like "Chicken Little", running around saying that "the sky is falling" when you still haven't taken the time to inform yourself by looking at GM's actual financial results! Go learn the truth James, then we can discuss these matters on a level playing field. Right now you're just making a fool of yourself because you're so far off-base with your financial comments. And that's what this discussion is all about James - GM's financial position. And when your whole position is based on an incredibly faulty knowlege of GM's financial position, it follows that your resultant comments are laughable at best and defamatory/libelous at worst. ;-) Dad, pardon my top posting here, but your exchange with James is pretty lengthy. You've brought up some good points and I would have to agree with you that James never read my post of November 29th. I'm glad to hear that someone did! *lol* I must confess that I was disappointed that James never responded to my message but I mistakenly thought that he had probably read it but didn't want to embarrass himself by responding. Clearly this is not the case. If he did read it, he must not have understood it. I hope he accepts your invitation to respond. By the way, it's StingRay, not Stingray. It's a long story but the early Corvette Sting Ray was two words. No big deal! >>>>John Horner wrote: >>>>People who do not have good arguments always resort to insult and [quoted text clipped - 250 lines] > your resultant comments are laughable at best and defamatory/libelous at > worst. ;-) > Dad, pardon my top posting here, but your exchange with James is pretty > lengthy. You've brought up some good points and I would have to agree with [quoted text clipped - 265 lines] >>your resultant comments are laughable at best and defamatory/libelous at >>worst. ;-) Ooops! Sorry about that StingRay! *lol* I doubt that James Reeves will respond to my post, just as he didn't respond to yours. It would be hard for him to defend his financial figures, since they are just plain wrong! Ha, Ha! His whole discussion was based on his screwed-up figures. No wonder he was so far off base. Maybe the reason he hasn't responded yet is because he has taken GM's SEC filings to his financial advisors for review! *lol* If we wait for James to review and understand GM's numbers, we will be well into 2010 before we hear from him on this topic again! > Dad, pardon my top posting here, but your exchange with James is pretty > lengthy. You've brought up some good points and I would have to agree with [quoted text clipped - 6 lines] > it's StingRay, not Stingray. It's a long story but the early Corvette > Sting Ray was two words. No big deal! My MS newsreader didn't pick up tour post. Can you repost? > Another wussy copout! I find it extremely interesting that you "what basis > of statistical/research" I base my opinions, when you clearly continue to > advocate that we "study" the matter! *lol Why not determine if the Ops idea has merit? One can't know until the cost to implement it is researched. If the cost is within reason, then it would make a heck of a lot of sense to offer the longer warranty to help sell a few more cars. If not, then it wouldn't. If you have hard data that suggests that increasing the warranty wouldn't be worth it (with certanty), it would be worth sharing here for the rest of us to consider (or reconsider) the idea. >> And we are all with you in the hopes that you are right, I'm sure. >> However, that "announcement" only addresses the "cost" side of the [quoted text clipped - 8 lines] > James! Does that sound earth shattering to you and your financial > advisors? Look closer. It all came from the financial arm. The revenue numbers from the car piece of the business contracted. (we are talking about cars and selling more cars, right?). Fortunately the financial arm picked up the slack of the declining automotive arm. GM's bonds aren't rated "junk" for nothing, by the way. That doesn't occur unless there is signficant risk that GM will default on them. I've asked StingRay to repost the link. For some reason my newsreader service didn't pick up his post. >>>For my money, the GM execs are a lot brighter than you and Mr. Reeves. >> >> That certaintly could be the case. Perhaps it is likely the case > > LMAO!!! James, don't fool yourself! It is definitely the case! I'm not argueing. You mentioned IQ before. If theirs is over 115, then you're right. If not, then you're wrong. Since you apparently know the IQ score of each of us, made teh comparison and that information is important to you somehow, then I will defer to your wisdom on the question. Frankly though it matters not to the discussion one way or theother. Neither do I care. There are smarter people than me. There are smarter people than you. So what? In any event, this isn't irrelivant to the warranty idea discussion either. >>(I don't know Mr. Horner). However that isn't relivant and isn't the >>point. Those execs you speak of have racked up $278 billion (yes [quoted text clipped - 7 lines] > > James, let it be clear that GM borrows money a lot cheaper than you! True or not, it's irrellivant since GM is not competing with me. Those that they *are* competing with (except Ford) have bond ratings that alows them to get cheaper money than GM can get. It's just a fact. Nothing to argue about. This is also largely irrellivant to the merits of the warranty topic, EXCEPT if using the deferred cost nature of term warranty (compared to the *up front cost" of "fire sales") and if that would ultimately lead to defered borrowing, then this would be germane. > You continue to use erroneous financial figures, which Stingray already > took you to task on, in his response to your post of November 29th under [quoted text clipped - 52 lines] > James, you continue to use those financial numbers that you apparently > dreamed up. As Stingray pointed out, you are way off=base! Yes they have some leverage options that will get them through 2-3 years or so (all things remaining equal). I believe I already stated that. You'll note that they have "$21.4 billion" in "cash and cash equillivants" (close to my 18-20 "in the bank" statement). Interesting that one would choose to use "current debt" over "total debt" and then do the oposite for assets and use "total assets" instead of assets "currently available". Yes they can leverage those fixed assets, but then "total debt" raises further. Why don't we either look at apples-to-apples or oranges-to-oranges? >> I sure hope so, for my grandkids sake! There are some very respectable >> financial people that don't seem as sure as you do. [quoted text clipped - 3 lines] > of the uninformed? Oh right, that's exactly what you did, as demonstrated > by your incredibly uninformed figures for debt and bank balance! *lol* One source, http://finance.yahoo.com/q/ks?s=GM Similar numbers have also been quoted on the cable financial channels when GM comes up for discussion and in some articles I've read these past few months. >> Also remember the common investment advise! Performance history does not >> predict future performance. In other words, what transpired before had [quoted text clipped - 3 lines] > > Ah, you're finally catching on! I'm glad we agree on something. :-) >>>It's too easy to use that tired excuse "It's management's fault that the >>>company has problems." >> >> Who's fault is it? > > Yours for buying imports! Nope, not me. Never have bought an "import". Neither has the wife or kids. > Unions for negotiating too well! And management was asleep, apparently. > The U.S. government for not ensuring a level playing field before allowing > a major influx of imports! Curious as to what isn't level about the playing field. Can you elaborate? I'd like to know your thoughts. Honest. ;-) But let's start a new thread on that topic. > GM management in some cases! Yep. And in the rest of the cases too. > GM employees who drive imports to work every day! That's actually a bit surprising. One would think the employees would have confidence in their own product. Does this really happen? If so, sad as hell! The other problem with that situation is that it tells everyone else that the people building the cars don't have faith in them. True or not, that will be the perception for some people that know this is occuring. > People like you who seemingly "make up" completely false financial numbers > and then publish them! (By the way, where did you get those numbers?) One place is here (also similar numbers using Ameritrade Apex tools) http://finance.yahoo.com/q/ks?s=GM Look for the section "Balance Sheet". In fact, this link shows the cash is now down to $15.1 billion from $18-$20 billion when I looked last (about 2-3 months ago). > You are too thick to be believed James! There are so many forms of risk > that effect a company like GM James. Do you know what "sovereign risk" is [quoted text clipped - 4 lines] > currency risk. There are literally hundreds of risks beyond the direct > control of management in a mutinational company. And it's management's job to know what s happening ad adjust for the changing climate of the business. There really is no one else responsible for it. Those things you mention can be a contributing factor to the causes of failure, but they are not the blame for the failure. The fault (blame) rests with those that run the business and who didn't make the correct mitigating decisions/actions to compensate for them. >>>Management don't have reliable crystal balls John that tell them just how >>>effectively foreign competition is going to impact them. [quoted text clipped - 7 lines] > comprehension! That previous paragraph was complete gobbledygook James. It > makes no sense whatsoever! I'm very familiar with data warehouse (DW) systems and the management reports that *can* come out of them (if they are managed properly) . DW systems aggregate data from many sources into meaningful and actionable information. One common example in the data warehouse business is how a DW system made it obvious to the executives at 7-11 over 15 years ago that if they just put the diapers next to the beer they'll sell more diapers. It worked! I'm guessing you aren't familiar with data warehouses. Sometimes called "knowledgebases". With the right data feeds/aggregation and reports, they're better than crystal balls. In fact, this could be one tool that could be used to determing the cost/expense curve for the inceased warranty idea. >> So, instead of doing some research and running some numbers to see for >> sure if looking into an idea like this might help to increase sales, [quoted text clipped - 6 lines] > your post. He did the real research James. You're just blowing smoke. I > challenge you to respond to Stingray. ;-) Uh, my response was to the topic in the subject heading...to studying if the warranty idea has merit. And if so, what level of warranty could be extended before it produced an unacceptable diminishing return. I honestly belive (yet to be verified, thus a research needed), that GM makes good enough cars that a 5 or 6 year 60 month warranty would cost them very little and may boost sales by a good margin. That would be a good thing, right? >> Now, I'll ask again. What alternative ideas do you have that might >> increase sales? > > Revenue looks pretty good year to year James. You'd better look at the > real numbers at http://www.gm.com/company/investor_information/sec/ What > numbers are you looking at? Ha, Ha! Since the subject heading/topic is about warranty associated with the car business, then separate out the other revenue sources and look at only the revenue numbers from the automotive piece of the business. Come back and let us know what the revenue trend is for the automotive piece. As a bonus, provide the market share numbers for the last 5 years and chart that trend as well. Then come back with a straight face and say that what you saw was good. >> o John has put forth the idea to look at increasing >> warranty coverage. [quoted text clipped - 12 lines] > your resultant comments are laughable at best and defamatory/libelous at > worst. ;-) I noticed you still didn't answer the question. Do you want to contribute to some ideas that might increase sales and regain some market share? Still haven't heard any. James, in the interests of brevity, I will respond to those portions of your post which appear to be in response to my comments and I will snip "Dad's" comments and your responses thereto. Before proceeding, I would offer you two pieces of advice. 1) When entering into discussions on various topics, it is always adviseable to stick to topics on which you are knowledgeable and/or well informed. Finance is clearly not your one of your strengths James and it can be frustrating for someone with financial acumen to try to educate someone without financial expertise, all within the boundaries of one or two posts within a News Group. To demonstrate your apparent lack of financial knowledge, in an earlier post, you comment: " However, that "announcement" only addresses the "cost" side of the balance sheet. They still need to address the declining "revenue" side of the balance sheet." James, to anyone with financial expertise, those comments are like dragging your nails over a chalk board. This is because neither "cost" nor "revenue" are Balance Sheet items. Balance Sheet items are Assets, Liabilities and Net Worth components. "Cost" and "revenue" are Income Statement items. I would discourage you from engaging in financial conversations in the future. Stick to what you know and understand. 2) The term "brighter" is not limited to IQ alone. It also encompasses common sense and good listening skills. It is quite possible to possess a very high IQ, but very little common sense and poor listening skills. Such a person would not be considered bright, by any stretch of the imagination. While in University, I was encouraged by several educators to join a large Mensa organization. I attended two meetings but was appalled by the lack of common sense demonstrated by many of the group's members. I discontinued attending Mensa after two very frustrating sessions, during which everyone wanted to speak, but no-one wanted to listen. On that note, I will proceed through this hodge podge of posts. >> James, there you go talking about something you have little knowledge of! >> Did you not look at the link that Stingray provided to GM's SEC filings? [quoted text clipped - 5 lines] > > Look closer. It all came from the financial arm. James, that is an error in fact. You seem to be confusing revenue with profitability. As stated above, GM had consolidated revenue of $ 141,424M (Million) for the 9 months ended September 30th, 2005. Of that revenue, $ 115,844M came from the automotive side. James that means 81.9% of revenue came from the automotive side. So you are wildly off-base when you say "It all came from the financial arm." > The revenue numbers from > the car piece of the business contracted. (we are talking about cars and > selling more cars, right?). Automotive revenue for the 9 months ended September 30th, 2005 was $ 115,844, down $ 2,560M or 2.16% from the prior year figure of $ 118,404M. James, a 2.16% fluctation year-to-year in revenue is infinitesimal in any major corporation. But don't believe me - run through the Fortune 500 companies and see for yourself. > Fortunately the financial arm picked up the > slack of the declining automotive arm. Revenue for the financial arm was up $ 2,001M or 8.48%. Again, not a major fluctuation, but a nice one. > GM's bonds aren't rated "junk" for nothing, by the way. That doesn't > occur > unless there is signficant risk that GM will default on them. James, many major companies have been rated "junk bond" status at various points in their history. The term sounds much nastier than it really is. Certainly, any downgrading in bond ratings suggest that there is an increased risk of default, but often the degrees of risk from category to category isn't that great. GM is still a much wooed company by the major financial houses in the world. And their borrowing costs are much lower than the average consumer. Certainly less that "prime rate". > True or not, it's irrellivant since GM is not competing with me. Those > that > they *are* competing with (except Ford) have bond ratings that alows them > to > get cheaper money than GM can get. It's just a fact. Nothing to argue > about. Wrong again James.Lots to argue about. Go check the "commercial paper" market with your favorite broker and you will be surprised at what you find. While you're there, find out how GM is faring in the Corporate Bond market. Check the yields for all the major issuers. Again you will obviously be surprised by GM's low cost of borrowing. >> You continue to use erroneous financial figures, which Stingray already >> took you to task on, in his response to your post of November 29th under [quoted text clipped - 66 lines] > note that they have "$21.4 billion" in "cash and cash equillivants" (close > to my 18-20 "in the bank" statement). Close but no cigar James! First of all, your figure was not 18-20. It was ~18. A variance of $ 3.4Billion is a 21.4% variance!!! That's a heck of lot more of a variance than any of GM's year-over-year revenue variances! Having said this, it is a moot point because the figure of $ 21.4Billion that you quote for "Cash & Cash Equivalents" is the figure for GMAC & affiliates, not for the automotive side! I will elaborate further on this "Cash" issue in the next response hereunder. > Interesting that one would choose to > use "current debt" over "total debt" and then do the oposite for assets > and > use "total assets" instead of assets "currently available". Yes they can > leverage those fixed assets, but then "total debt" raises further. Why > don't we either look at apples-to-apples or oranges-to-oranges? James, it is only "interesting" to a non-financially astute person such as yourself. I didn't "choose to use "current debt" over "total debt" and then do the oposite for assets and use "total assets" instead of assets "currently available"". Firstly, I posted the "Total Consolidated Debt" figure of $ 446 Billion, just to show you that your figure of "~278 billion dollars in debt " was way off-base! Where did you get that figure James? I'm not at all clear why you have such a fixation on "Total Debt" though James. From a "Balance Sheet" perspective, "Total Debt" plus "Shareholder Equity" always equals "Current Assets" plus "Non-Current/Fixed Assets". It's a very simple formula. No mystery here. The relationship between Current Assets and Current Liabilities is far more information. Secondly James, you are just plain wrong when you say that I "use(d) "total assets" instead of assets "currently available"". " I at no point used any figure for "total assets". All of my asset figures were very clearly "Current Assets". I never once added in "Non-Current or Fixed Assets". Thirdly, I focused on "Current Assets" and Current Liabilities" because that is what financial analysts do James. A company's "Working Capital" is determined in this manner. For your information James, Working Capital is defined as the ability of a company's "Liquid" or "Current" assets to meet their short term (Less than 1 year) financial obligations. It is the lifeblood of a company. "Cash & Cash Equivalents" is only one category of "Current Asset". The financially astute company does what GM has done and invests surplus cash into other short term, higher yield assets such as Investments in Securities, Finance Receivables, Loans Held For Sale and other short term Assets Held For Sale as well as the usual operational assets such as Accounts/Notes Receivable and Inventory. So James, Cash in the Bank doesn't mean a lot in itself. You have to look at a company's Current Assets in their entirety to know their ability to handle their Current Liability commitments coming due or payable within the next 12months. And in this regard, GM has strong Working Capital at September 30, 2005 with Total Current Assets of $ 305Billion, which would quite easily handle their Current Debt, which was $ 74.7 Billion. This leaves them with a Working Capital Surplus of $ 240.3Billion. There's nothing to be alarmed about here James! >> Respected by whom James? You and John Horner? Name one well-known >> respected financial person James. Or did you simply jump on the bandwagon [quoted text clipped - 3 lines] > One source, > http://finance.yahoo.com/q/ks?s=GM James, the link that you provided is to a Yahoo Financial page and it is typical of the type of information available on any financial site. As it happens, I use Yahoo as my Home Page and often use their financial data. Yahoo provides select ratios and market performance over the past year. This is good information if you're considering buying or selling GM stock, but from an informational perspective, I find the company's actual SEC filings far more useful. When I'm thinking of buying any particular stock, I prefer crunching my own ratios because these financial pages do make mistakes. A good example of this is the Figure Yahoo shows for "Total Debt". You mistakenly assumed that their figure of $ 278.23B was correct. But had you clicked on "Balance Sheet" at the bottom of the page, you would have seen that their "Total Debt" was $ 446.7Billion, as I stated above. That's why I prefer crunching my own numbers and ratios from SEC filings James. ;-) > Similar numbers have also been quoted on the cable financial channels when > GM comes up for discussion and in some articles I've read these past few > months. James, you have to understand that many cable financial channels employ messengers (reporters) who merely read the script in front of them. Very few do their own analysis. So when they receive "junk in", it results in "junk out". I often find myself laughing at these messengers. One of their most frequent Faux-pas' is comparing results over the same period a year earlier. I can't count the times that I've heard a reporter say "Profits for the 3rd quarter were up a whopping 230% over a year earlier." What they don't take the time to investigate is whether profits a year earlier were awful for some reason. If for example a company wrote down an unusually large amount of capitalized R&D or any other Asset for that matter, the comment that "Profits for the 3rd quarter were up a whopping 230% over a year earlier." is very misleading. In fact, excluding the "one-time" writedown, profits may have been down. So James, my advice here is simply to not believe everything you read on > That's actually a bit surprising. One would think the employees would > have [quoted text clipped - 3 lines] > that the people building the cars don't have faith in them. True or not, > that will be the perception for some people that know this is occuring. James, your comments weren't in response to my post, but I will respond that a lady who works at a GM plant in Oshawa, Canada confirmed this. From her comments though, I don't think it's that they lack confidence in their own product. It's more that they are simply short sighted and are often driven solely by price. > Look for the section "Balance Sheet". In fact, this link shows the cash > is > now down to $15.1 billion from $18-$20 billion when I looked last (about > 2-3 > months ago). James, you make me laugh with this one! As an analyst, it is an "extremely good thing" that cash is down! Any company. large or small, should strive to completely eliminate "Cash" from their Balance Sheet. Cash is a non-revenue producing asset. Cash should be investing in some short term investment as quickly as possible. Unfortunately, that is nigh unimpossible with a large company, who on any given day have tens of millions of dollars flowing in and can quite easily end any given day with millions sitting in the account gathering dust, but no interest income! When Yahoo Finance or any other financial site shows you a figure for "Cash", you should always look for a downward trend or at the very least, the absence of an upward trend. The only reason financial sites show numbers for "Cash" is so you can gage how well a company invests their cash into higher return Current Assets. Now the really bad news James, the figure of $ 15.3Billion that Yahoo uses for "Cash" is wrong. Again, if you go to the bottom of their page and click on "Balance Sheet", you'll see that GM's actual Cash figure was a shade over $ 35Billion. Another reason to use any company's SEC filings. > And it's management's job to know what s happening ad adjust for the > changing climate of the business. There really is no one else responsible [quoted text clipped - 3 lines] > rests with those that run the business and who didn't make the correct > mitigating decisions/actions to compensate for them. This wasn't my topic James, but I do have an opinion on it. Bear with me here. As mentioned, I do have a financial background. Dad brought up a very good topic of discussion when he mentioned political risk. Major banks and governments often lend massive amounts of money to both industrialized and developing nations. These loans can default for reasons beyond the ability of the lenders to reasonably anticipate in time to recover their funds. For example, the risk to lending money in Iraq increased sharply when the U.S. moved in. And the prospects of recovery of pre-existing loans dropped drastically and certainly before the lenders (including the U.S. government) could react. Similarly, companies like GM make massive investments of capital in foreign countries. Using hypothetical situations, I would like to suggest scenarios where GM management might have little control or warning of increased political risk. Civil war in Mexico would have a drastic effect on U.S. interests in that country. Can you blame that on GM management? When they invested in Mexico, they would, of necessity, have looked at political risk, but political risk can change quickly and you certainly can't repatriate major capital investments on short notice! Another example that we have seen recently are acts of God. Can you blame management for losses attributable to acts of God? What about 911? Are the Trade Center owners responsible for the losses they incurred? Was that poor management? So it is grossly unfair to label management of any company as responsible for everything that happens to a company. > I'm very familiar with data warehouse (DW) systems and the management > reports that *can* come out of them (if they are managed properly) . DW [quoted text clipped - 11 lines] > warranty > idea. James, DW systems, as you have pointed out yourself, are only as good as the input. Data bases are simply stored information and as you say, must be "managed properly". I have had far too many associates waste their time combing DW systems, such that we used the phrase "analysis paralysis" to describe the inability of many of them to use pertinent data to make an informed decision. Many would rather analyze than make decisions. There has to be a happy medium. > Uh, my response was to the topic in the subject heading...to studying if > the > warranty idea has merit. And if so, what level of warranty could be > extended before it produced an unacceptable diminishing return. I > honestly > belive (yet to be verified, thus a research needed), There's that Analysis Paralysis I mentioned! There you go trying to reinvent the wheel again! GM has already done this analysis for you. Why do it again? Read Note 7, Product Warranty Liability, on Page 15 of GM's SEC filing. As at September 30, 2005, there was Warranty Liability of $ 9.3Billion. James, now to answer your question, a little Economics 101. If a company is losing money from any part of their business (in GM's case, let's take the automotive business) on a standalone basis, no Warranty can be offered, without impairing said company's financial position. There's your research James. No further analysis is required. > that GM makes good > enough cars that a 5 or 6 year 60 month warranty would cost them very > little > and may boost sales by a good margin. That would be a good thing, right? If GM is losing money on a per-vehicle basis James, increased Warranty costs and increased sales will only lose them more money. Simply, either profit margins per vehicle have to increase or costs per vehicle have to decrease. End of story. That's why GM has implimented plans to close numerous plants and substantially reduce labor costs. They can definitely improve their efficiency in the process. Hey, those GM executive may be brighter than us! ;-) Here's GM's link again James, although you must already have it. As stated, Revenue looks pretty good year to year. But I won't be buying their shares just yet! http://www.gm.com/company/investor_information/sec/ James, in the interests of brevity, I will respond to those portions of your post which appear to be in response to my comments and I will snip "Dad's" comments and your responses thereto. Before proceeding, I would offer you two pieces of advice. 1) When entering into discussions on various topics, it is always adviseable to stick to topics on which you are knowledgeable and/or well informed. Finance is clearly not your one of your strengths James and it can be frustrating for someone with financial acumen to try to educate someone without financial expertise, all within the boundaries of one or two posts within a News Group. To demonstrate your apparent lack of financial knowledge, in an earlier post, you comment: " However, that "announcement" only addresses the "cost" side of the balance sheet. They still need to address the declining "revenue" side of the balance sheet." James, to anyone with financial expertise, those comments are like dragging your nails over a chalk board. This is because neither "cost" nor "revenue" are Balance Sheet items. Balance Sheet items are Assets, Liabilities and Net Worth components. "Cost" and "revenue" are Income Statement items. I would discourage you from engaging in financial conversations in the future. Stick to what you know and understand. 2) The term "brighter" is not limited to IQ alone. It also encompasses common sense and good listening skills. It is quite possible to possess a very high IQ, but very little common sense and poor listening skills. Such a person would not be considered bright, by any stretch of the imagination. While in University, I was encouraged by several educators to join a large Mensa organization. I attended two meetings but was appalled by the lack of common sense demonstrated by many of the group's members. I discontinued attending Mensa after two very frustrating sessions, during which everyone wanted to speak, but no-one wanted to listen. On that note, I will proceed through this hodge podge of posts. >> James, there you go talking about something you have little knowledge of! >> Did you not look at the link that Stingray provided to GM's SEC filings? [quoted text clipped - 5 lines] > > Look closer. It all came from the financial arm. James, that is an error in fact. You seem to be confusing revenue with profitability. As stated above, GM had consolidated revenue of $ 141,424M (Million) for the 9 months ended September 30th, 2005. Of that revenue, $ 115,844M came from the automotive side. James that means 81.9% of revenue came from the automotive side. So you are wildly off-base when you say "It all came from the financial arm." > The revenue numbers from > the car piece of the business contracted. (we are talking about cars and > selling more cars, right?). Automotive revenue for the 9 months ended September 30th, 2005 was $ 115,844, down $ 2,560M or 2.16% from the prior year figure of $ 118,404M. James, a 2.16% fluctation year-to-year in revenue is infinitesimal in any major corporation. But don't believe me - run through the Fortune 500 companies and see for yourself. > Fortunately the financial arm picked up the > slack of the declining automotive arm. Revenue for the financial arm was up $ 2,001M or 8.48%. Again, not a major fluctuation, but a nice one. > GM's bonds aren't rated "junk" for nothing, by the way. That doesn't > occur > unless there is signficant risk that GM will default on them. James, many major companies have been rated "junk bond" status at various points in their history. The term sounds much nastier than it really is. Certainly, any downgrading in bond ratings suggest that there is an increased risk of default, but often the degrees of risk from category to category isn't that great. GM is still a much wooed company by the major financial houses in the world. And their borrowing costs are much lower than the average consumer. Certainly less that "prime rate". > True or not, it's irrellivant since GM is not competing with me. Those > that > they *are* competing with (except Ford) have bond ratings that alows them > to > get cheaper money than GM can get. It's just a fact. Nothing to argue > about. Wrong again James.Lots to argue about. Go check the "commercial paper" market with your favorite broker and you will be surprised at what you find. While you're there, find out how GM is faring in the Corporate Bond market. Check the yields for all the major issuers. Again you will obviously be surprised by GM's low cost of borrowing. >> You continue to use erroneous financial figures, which Stingray already >> took you to task on, in his response to your post of November 29th under [quoted text clipped - 66 lines] > note that they have "$21.4 billion" in "cash and cash equillivants" (close > to my 18-20 "in the bank" statement). Close but no cigar James! First of all, your figure was not 18-20. It was ~18. A variance of $ 3.4Billion is a 21.4% variance!!! That's a heck of lot more of a variance than any of GM's year-over-year revenue variances! Having said this, it is a moot point because the figure of $ 21.4Billion that you quote for "Cash & Cash Equivalents" is the figure for GMAC & affiliates, not for the automotive side! I will elaborate further on this "Cash" issue in the next response hereunder. > Interesting that one would choose to > use "current debt" over "total debt" and then do the oposite for assets > and > use "total assets" instead of assets "currently available". Yes they can > leverage those fixed assets, but then "total debt" raises further. Why > don't we either look at apples-to-apples or oranges-to-oranges? James, it is only "interesting" to a non-financially astute person such as yourself. I didn't "choose to use "current debt" over "total debt" and then do the oposite for assets and use "total assets" instead of assets "currently available"". Firstly, I posted the "Total Consolidated Debt" figure of $ 446 Billion, just to show you that your figure of "~278 billion dollars in debt " was way off-base! Where did you get that figure James? I'm not at all clear why you have such a fixation on "Total Debt" though James. From a "Balance Sheet" perspective, "Total Debt" plus "Shareholder Equity" always equals "Current Assets" plus "Non-Current/Fixed Assets". It's a very simple formula. No mystery here. The relationship between Current Assets and Current Liabilities is far more information. Secondly James, you are just plain wrong when you say that I "use(d) "total assets" instead of assets "currently available"". " I at no point used any figure for "total assets". All of my asset figures were very clearly "Current Assets". I never once added in "Non-Current or Fixed Assets". Thirdly, I focused on "Current Assets" and Current Liabilities" because that is what financial analysts do James. A company's "Working Capital" is determined in this manner. For your information James, Working Capital is defined as the ability of a company's "Liquid" or "Current" assets to meet their short term (Less than 1 year) financial obligations. It is the lifeblood of a company. "Cash & Cash Equivalents" is only one category of "Current Asset". The financially astute company does what GM has done and invests surplus cash into other short term, higher yield assets such as Investments in Securities, Finance Receivables, Loans Held For Sale and other short term Assets Held For Sale as well as the usual operational assets such as Accounts/Notes Receivable and Inventory. So James, Cash in the Bank doesn't mean a lot in itself. You have to look at a company's Current Assets in their entirety to know their ability to handle their Current Liability commitments coming due or payable within the next 12months. And in this regard, GM has strong Working Capital at September 30, 2005 with Total Current Assets of $ 305Billion, which would quite easily handle their Current Debt, which was $ 74.7 Billion. This leaves them with a Working Capital Surplus of $ 240.3Billion. There's nothing to be alarmed about here James! >> Respected by whom James? You and John Horner? Name one well-known >> respected financial person James. Or did you simply jump on the bandwagon [quoted text clipped - 3 lines] > One source, > http://finance.yahoo.com/q/ks?s=GM James, the link that you provided is to a Yahoo Financial page and it is typical of the type of information available on any financial site. As it happens, I use Yahoo as my Home Page and often use their financial data. Yahoo provides select ratios and market performance over the past year. This is good information if you're considering buying or selling GM stock, but from an informational perspective, I find the company's actual SEC filings far more useful. When I'm thinking of buying any particular stock, I prefer crunching my own ratios because these financial pages do make mistakes. A good example of this is the Figure Yahoo shows for "Total Debt". You mistakenly assumed that their figure of $ 278.23B was correct. But had you clicked on "Balance Sheet" at the bottom of the page, you would have seen that their "Total Debt" was $ 446.7Billion, as I stated above. That's why I prefer crunching my own numbers and ratios from SEC filings James. ;-) > Similar numbers have also been quoted on the cable financial channels when > GM comes up for discussion and in some articles I've read these past few > months. James, you have to understand that many cable financial channels employ messengers (reporters) who merely read the script in front of them. Very few do their own analysis. So when they receive "junk in", it results in "junk out". I often find myself laughing at these messengers. One of their most frequent Faux-pas' is comparing results over the same period a year earlier. I can't count the times that I've heard a reporter say "Profits for the 3rd quarter were up a whopping 230% over a year earlier." What they don't take the time to investigate is whether profits a year earlier were awful for some reason. If for example a company wrote down an unusually large amount of capitalized R&D or any other Asset for that matter, the comment that "Profits for the 3rd quarter were up a whopping 230% over a year earlier." is very misleading. In fact, excluding the "one-time" writedown, profits may have been down. So James, my advice here is simply to not believe everything you read on Yahoo Financial. > That's actually a bit surprising. One would think the employees would > have [quoted text clipped - 3 lines] > that the people building the cars don't have faith in them. True or not, > that will be the perception for some people that know this is occuring. James, your comments weren't in response to my post, but I will respond that a lady who works at a GM plant in Oshawa, Canada confirmed this. From her comments though, I don't think it's that they lack confidence in their own product. It's more that they are simply short sighted and are often driven solely by price. > Look for the section "Balance Sheet". In fact, this link shows the cash > is > now down to $15.1 billion from $18-$20 billion when I looked last (about > 2-3 > months ago). James, you make me laugh with this one! As an analyst, it is an "extremely good thing" that cash is down! Any company. large or small, should strive to completely eliminate "Cash" from their Balance Sheet. Cash is a non-revenue producing asset. Cash should be investing in some short term investment as quickly as possible. Unfortunately, that is nigh unimpossible with a large company, who on any given day have tens of millions of dollars flowing in and can quite easily end any given day with millions sitting in the account gathering dust, but no interest income! When Yahoo Finance or any other financial site shows you a figure for "Cash", you should always look for a downward trend or at the very least, the absence of an upward trend. The only reason financial sites show numbers for "Cash" is so you can gage how well a company invests their cash into higher return Current Assets. Now the really bad news James, the figure of $ 15.3Billion that Yahoo uses for "Cash" is wrong. Again, if you go to the bottom of their page and click on "Balance Sheet", you'll see that GM's actual Cash figure was a shade over $ 35Billion. Another reason to use any company's SEC filings. > And it's management's job to know what s happening ad adjust for the > changing climate of the business. There really is no one else responsible [quoted text clipped - 3 lines] > rests with those that run the business and who didn't make the correct > mitigating decisions/actions to compensate for them. This wasn't my topic James, but I do have an opinion on it. Bear with me here. As mentioned, I do have a financial background. Dad brought up a very good topic of discussion when he mentioned political risk. Major banks and governments often lend massive amounts of money to both industrialized and developing nations. These loans can default for reasons beyond the ability of the lenders to reasonably anticipate in time to recover their funds. For example, the risk to lending money in Iraq increased sharply when the U.S. moved in. And the prospects of recovery of pre-existing loans dropped drastically and certainly before the lenders (including the U.S. government) could react. Similarly, companies like GM make massive investments of capital in foreign countries. Using hypothetical situations, I would like to suggest scenarios where GM management might have little control or warning of increased political risk. Civil war in Mexico would have a drastic effect on U.S. interests in that country. Can you blame that on GM management? When they invested in Mexico, they would, of necessity, have looked at political risk, but political risk can change quickly and you certainly can't repatriate major capital investments on short notice! Another example that we have seen recently are acts of God. Can you blame management for losses attributable to acts of God? What about 911? Are the Trade Center owners responsible for the losses they incurred? Was that poor management? So it is grossly unfair to label management of any company as responsible for everything that happens to a company. > I'm very familiar with data warehouse (DW) systems and the management > reports that *can* come out of them (if they |
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