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Log inGM Posts $15 Billion Loss As Sales Skid
GM Posts $15 Billion Loss As Sales Skid
by Outspoken on Sat Aug 02, 2008 6:56 am
GM Posts $15 Billion Loss As Sales Skid
Quarterly Drop Is Company's Third Largest in History
By Jordan Weissmann
Washington Post Staff Writer
Bogged down by a dismal U.S. car market and massive one-time costs, General Motors reported a $15.5 billion second-quarter loss yesterday, the third largest quarterly loss in company history.
Even though chief executive G. Richard Wagoner Jr. had warned investors to be ready for a "significant loss," analysts and industry watchers said the numbers were more dramatic than they had expected. They also predicted that the company will have tough months ahead as it tries to right itself in a faltering economy.
"Are we at the bottom of this cycle? I don't think so," said George Magliano, director of automotive research at Global Insight.
GM chalked up most of it losses to one-time expenses. Those costs totaled $9.1 billion and included $3.3 billion in buyouts for 19,000 hourly workers and $2 billion in depreciated value of its leasing fleet. The expenses also covered strike settlements, restructuring costs and liabilities at its former parts division.
The company's sales improved abroad but the declines in North America were steep enough to knock revenues down to $38.2 billion, from $46.7 billion a year ago.
Excluding the one-time expenses, the automaker's $11.21-a-share loss was still far worse than the $2.62-a-share loss predicted by analysts in a survey by Thomson Financial.
"This quarter is clearly characterized by a number of special items," said GM spokeswoman Renee Rashid-Merem. "If you look at the core business, we expected continued challenges in the North American business largely driven by the economic factors in the U.S. market. Globally, we continue to drive growth."
The company's July sales, which were released yesterday, didn't do much to soften the day's news. Overall, sales were down 26.7 percent from the same month a year ago. While the company moved more of its popular small cars such as the Chevy Malibu and the Cobalt, sales of pickups and sport utility vehicles continued its freefall. Light trucks were down 39.7 percent for month. For the year, vehicle sales are off 18 percent.
Toyota, Ford and Nissan also reported double-digit drops in sales.
GM burned through $3.6 billion in the second quarter, leaving it with about $26 billion in cash and credit. Industry observers said they are keeping a keen eye on whether the company will have enough cash to make it to 2010, when they expect the economy to turn around.
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/01/AR2008080100673.html?wpisrc=newsletter
Quarterly Drop Is Company's Third Largest in History
By Jordan Weissmann
Washington Post Staff Writer
Bogged down by a dismal U.S. car market and massive one-time costs, General Motors reported a $15.5 billion second-quarter loss yesterday, the third largest quarterly loss in company history.
Even though chief executive G. Richard Wagoner Jr. had warned investors to be ready for a "significant loss," analysts and industry watchers said the numbers were more dramatic than they had expected. They also predicted that the company will have tough months ahead as it tries to right itself in a faltering economy.
"Are we at the bottom of this cycle? I don't think so," said George Magliano, director of automotive research at Global Insight.
GM chalked up most of it losses to one-time expenses. Those costs totaled $9.1 billion and included $3.3 billion in buyouts for 19,000 hourly workers and $2 billion in depreciated value of its leasing fleet. The expenses also covered strike settlements, restructuring costs and liabilities at its former parts division.
The company's sales improved abroad but the declines in North America were steep enough to knock revenues down to $38.2 billion, from $46.7 billion a year ago.
Excluding the one-time expenses, the automaker's $11.21-a-share loss was still far worse than the $2.62-a-share loss predicted by analysts in a survey by Thomson Financial.
"This quarter is clearly characterized by a number of special items," said GM spokeswoman Renee Rashid-Merem. "If you look at the core business, we expected continued challenges in the North American business largely driven by the economic factors in the U.S. market. Globally, we continue to drive growth."
The company's July sales, which were released yesterday, didn't do much to soften the day's news. Overall, sales were down 26.7 percent from the same month a year ago. While the company moved more of its popular small cars such as the Chevy Malibu and the Cobalt, sales of pickups and sport utility vehicles continued its freefall. Light trucks were down 39.7 percent for month. For the year, vehicle sales are off 18 percent.
Toyota, Ford and Nissan also reported double-digit drops in sales.
GM burned through $3.6 billion in the second quarter, leaving it with about $26 billion in cash and credit. Industry observers said they are keeping a keen eye on whether the company will have enough cash to make it to 2010, when they expect the economy to turn around.
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/01/AR2008080100673.html?wpisrc=newsletter
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Plato (427-347 BC)
