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Car Forum / GMC Cars / January 2006GM Posts $8.5B loss for 2005
Wow, that is some serious money. http://news.yahoo.com/s/ap/20060126/ap_on_bi_ge/earns_gm > Wow, that is some serious money. > > http://news.yahoo.com/s/ap/20060126/ap_on_bi_ge/earns_gm Hemorrhaging money and sales at that rate would seem to mean that GM stands little chance of making it to the 2007 contract negotiations without declaring bankruptcy. Since GM is just about betting the farm (and Ford too) on the "success" of their new large SUV and large truck lineup that will, most likely, prove to be a vain hope since gas prices are very unlikely to go down for any significant amount of time. Up yes, down no. Sales of those vehicles won't stop but they will be down very significantly. I would think that it is also a given that the '07 contract talks are going to be the most difficult and contentious in living memory. >>Wow, that is some serious money. >> [quoted text clipped - 10 lines] > I would think that it is also a given that the '07 contract talks are going > to be the most difficult and contentious in living memory. GM is in a very tough spot right now. The problem with the bankruptcy route is that it could further push away customers and lead to even more sales declines, which makes the problems even worse. Right now the marketplace continues to move towards smaller, more fuel efficient vehicles. GM unfortunately is just now rolling out it's updated truck line just when truck sales are tanking. New models typically launch with a higher initial cost structure than those of the models they replace because of start up inefficiencies. Like many, I still think that GM needs to pare itself down to two brands and then make every product in those brands best-in-class and focus it's huge marketing expenses on the support of those brands. Chevy and Cadillac are big enough brands to cover everything GM has to offer the marketplace. Pontiac, Buick, Saturn, Saab and GMC are just costly distractions. How much does GM spend every year cooking up slight variations on it's vehicles just to be able to slap other names on them.? Chevy for the everyman and Cadillac for the high end covers the market completely. Imagine the marketing dollars which would be available to Chevy and Cadillac if all the money being pissed away on the secondary brands were available to the primary brands. I also still think that GM should dramatically improve the terms of it's new car warranty to demonstrate the confidence it says it has in the quality and durability of GM products. But, none of things are going to happen due to inertia and a lack of leadership. John The bad thing about just going on and trying to mend things when we know they will not get better only means that most people loose By going bankrupt and restarting is much cleaner Immediatly new companies will start where there are factories now and all the workers will get new jobs quickly It is only in the interests of a few shareholders, the management, insiders, some banks to go on while they rip off as much as they can from the remains "It was a year in which two significant fundamental weaknesses in our North American operations were fully exposed -- our huge legacy cost burden and our inability to adjust structural costs in line with falling revenue," Chief Executive Rick Wagoner said in a statement. He must have forgotten to mention the third "significant fundamental weaknesses" Shitty vehicles > Wow, that is some serious money. > > http://news.yahoo.com/s/ap/20060126/ap_on_bi_ge/earns_gm How much is that per car sold? $8 500 000 000 000 So GM is not just giving the cars away they pay you to take one You have to hurry up because they can not keep doing that for very much longer > How much is that per car sold? > > $8 500 000 000 000 gosinn, you must have missed a few math classes! *LOL* Your figure is $ 8.5 Trillion. $8.5B is $ 8,500,000,000. ;-) You were revelling too much in GM's misfortune. Number of zeros U.S. & scientific community Other countries 3 thousand thousand 6 million million 9 billion 1000 million (1 milliard) 12 trillion billion 15 quadrillion 1000 billion 18 quintillion trillion > Number of zeros U.S. & scientific community > 9 billion > 12 trillion Thank you for proving my comment correct gosinn. Although your chart is flawed. To be accurate, it should cite the number of numerals, not the number of zeros, to the left of the decimal. Thanks again! ;-) >> How much is that per car sold? >> [quoted text clipped - 3 lines] > 8.5 Trillion. $8.5B is $ 8,500,000,000. ;-) You were revelling too much > in GM's misfortune. Reporters never were too bright :-) How many cars did they sell? GM total US sales are around five times as many a Toyota Motors. GM sells half again as many vehicles as Ford which sells more than Chrysler. mike hunt > How many cars did they sell? So how much do they pay each customer to take the cars? If you give me the number of cars sold I can do the division myself > GM total US sales are around five times as many a Toyota Motors. GM sells > half again as many vehicles as Ford which sells more than Chrysler. > > mike hunt > > > How many cars did they sell? >SNIP< > > > How many cars did they sell? http://www.greencarcongress.com/sales/ "GM sold 9.2 million vehicles worldwide in 2005" But, it isn't a simple division problem. GM made money in almost all it's markets except North America. Later, Andy C.(never #) > So how much do they pay each customer to take the cars? > > If you give me the number of cars sold I can do the division myself Doesn't seem likely, considering. Dave 9 billion 1000 million (1 milliard) 12 trillion billion Ok if we take the US definition of billion with 9 zeros the the loss was $8 600 000 000 They sold 9 200 000 cars That means the paid customers $935 to take a car from them That would then be easy to calculate how long they can continue producing cars and giving them away with a check for $935 with each car But the dealers must make money or they cannot pay their rent and in Phoenix the dealers all seem to be doing just fine. TPBeach > But the dealers must make money or they cannot pay their rent and in > Phoenix the dealers all seem to be doing just fine. > TPBeach The dealer's financial condition is only loosely coupled to the manufacturer's. New cars are not the primary money makers for a car dealership. Used cars & service are the big profit drivers. The new car aspect mostly serves to prime the pump for everything else. John Actually a dealer generally does not make a penny of profit on a new car, if the deal involves a late model, trade. Any potential profit is tied up in the trade(s) until the net/net invoice price is realized at sale. At that point the dealer must still earn back his gross from subsequent trade(s) before an actual profit is earned. Depending on the net value of the subsequent trade(s) that may require three or four sales before a profit is actually earned. That is why people have the erroneous impression that the dealership makes more profit on used cars ;) mike hunt >> But the dealers must make money or they cannot pay their rent and in >> Phoenix the dealers all seem to be doing just fine. [quoted text clipped - 6 lines] > > John Yes, $8.5B is $ 8,500,000,000. ;-) 500,000,000 is 500 million. Innumeracy is rampant in the US these days. > Wow, that is some serious money. > snip Every publisher seems to have their own spin on this matter. Is the cup half full or half empty? A US$3.4 billion loss, before "Extraordinary Items" is a far cry from an $8.5B loss! News stories can be misleading. Check out this link: http://www.canadiandriver.com/news/060127-5.htm Detroit, Michigan - General Motors has reported a 2005 calendar-year loss, excluding special items, of US$3.4 billion, compared with a net income of US$3.6 billion in 2004. Including special items, GM reported a loss of US$8.6 billion, compared to net income of US$2.8 billion in 2004. "2005 was one of the most difficult years in GM's history, driven by poor performance in North America," said Rick Wagoner, Chairman and CEO. "It was a year in which two significant fundamental weaknesses in our North American operations were fully exposed: our huge legacy cost burden and our inability to adjust structural costs in line with falling revenue. Our results were also dramatically and adversely affected by charges for restructuring and matters associated with Delphi Corp.'s Chapter 11 filing." GM sold 9.2 million vehicles worldwide in 2005 |
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