GM report: $9.6 billion lost in 4th quarter alone

obama-falling-money1As predicted in a gazillion places, GM is ready for the taxpayers to pay their salaries and benefits for another quarter.

They are out of money as of April 1, just as they were out of money as of end of last December–and they will be out of money again as of July 1, and……

NEW YORK (CNNMoney.com) — General Motors posted a $9.6 billion net loss in the fourth quarter, a period in which its sales plunged and it needed a federal bailout to avoid filing for bankruptcy.

The company also disclosed that it burned through $6.2 billion in cash during the last three months of the year. The company ended the quarter with cash of $14 billion.

If not for the $4 billion federal loan it received on Dec. 31, GM’s cash level would have fallen below the $11 billion to $14 billion in cash the company has said it needs to continue operations.

I imagine Chrysler is next in line to meet payroll. At this point, the government of the USA is GM and Chrysler’s payroll employer.

Analysts say the future of the company now depends almost solely on whether it receives more loans. Efraim Levy, an auto equity analyst with Standard & Poor’s, said he thinks GM could very well burn through more than $14 billion this year.

“Do they get money or not get money, and do we prolong this or not prolong this?” added Kevin Tynan, an auto analyst with Argus Research. “I think all the other questions are answered. Right now the companies and analysts are looking at 2009 as being a lost cause. This first quarter’s results are going to be even more brutal.”

Tynan poses an interesting question.  Allowing two auto manufacturers to go down will create huge additional unemployent to an already horrible picture. But bankruptcy and restructuring is an option, which would get the USA off the hook and still save most, but not all, jobs.  We will have to pay for that bankruptcy as well. But the financial responsibility of the USA would end there. 

As it stands now, there is a pattern emerging, and it looks like we will be asked to meet payroll for GM quarterly for an unknown period of years–until we say “No”. Then we will be paying for a bankruptcy and restructuring besides.  If all we are doing is delaying the inevitable, wouldn’t it be wiser and less expensive to just get on with it?

Another question from the Bigger Picture is: If we keep handing out trillions we don’t have, how much will a dollar be worth by the end of the year? This is a question that impacts EVERYONE in America.

Apparently GM had talks  earliet this week with the Auto Recovery Program leaders, Geithner and Summers–and both of them drive foreign cars.  In fact, out of the 8 people on their committee and their 10 aids, only two own American cars.  Just saying.

20 Responses

  1. Awww, pouty l’i’l Uppity,

    They don’t drive american cars? And you blame them? Who better to know…?

    For the record, I haven’t owned a car since 1990 ( I rented when I needed since meeting my S.O., who does have one)

    And, when I GET MY F****’n bailout, then I’ll be happy to see these little pampered snot noses get theirs’ – NOT BEFORE!!!

    -MS

  2. Oops,

    “until,” not “since.”

    -MS

  3. The question no one asks the big three. How do you plan on selling more cars? Cutting cost when you have no income doesn’t really help the problem.

    Looking at UW’s unemployment stats, who the hell would be in the market for a new car anyhoo?
    The need to sell 480,000 cars at 20k each to make up that loss.

  4. Dead,

    Uh-uh,

    480,000 cars @ $20k per is only the GROSS! Ya’ need a profit to wipe out a loss…

    Just sayin’.

    -MS

  5. Good morning.

    I think GM is confused. Someone left a kitty picture on the side of the White House and GM is sniffing around for a free meal. Helping someone genuinely in need? Absolutely. Slopping the hogs? Not so much.

  6. The MSM has done a lot of articles about those overpaid workers in the auto industries, and the burden of paying health care for the workers who have retired. This article is sure to make you feel a certain sadness for the GM and Ford CEOs:

    Sometimes…you don’t get what you pay for…..

    http://www.reuters.com/

    Print | Close this window
    GM CEO’s compensation jumps 64 percent in 2007
    Fri Apr 25, 2008 5:47pm EDT

    By David Bailey

    DETROIT (Reuters) – General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) Chief Executive Rick Wagoner’s salary and other compensation rose 64 percent in 2007 to about $15.7 million, mainly due to option grants, according to a proxy filed on Friday.

    The GM compensation committee cited significant progress over the past few years in reducing the automaker’s health care cost burden, increasing growth internationally and improvements in its cars and trucks in the 2007 awards to executives.

    Wagoner’s compensation rose from about $9.57 million in 2006. The figure was arrived at based on Wagoner’s salary, all other compensation and the basis of annual grants.

    GM paid Wagoner a salary of $1.6 million in 2007, along with $1.8 million in non-equity incentive compensation and nearly $700,000 for other compensation that includes insurance benefits, security, aircraft expenses and other factors.

    GM, which reported a record $39 billion net loss in 2007, released the figures in a proxy statement on Friday afternoon that was filed with the U.S. Securities and Exchange Commission.

    The automaker, which has been restructuring, reached a contract in 2007 with the United Auto Workers that has permitted buyouts for its UAW hourly workers, a second-tier wage for new hires and a plan that will push billions of health care obligations into a union-aligned trust.

    Wagoner had accepted a reduced base salary in 2006 and 2007 and only about 16 percent of his compensation is guaranteed. In March, GM granted Wagoner a raise to $2.2 million per year, restoring his salary to 2006 levels.

    Fritz Henderson, who was promoted to president and chief operating officer in March, received compensation of about $9.3 million in 2007, up from about $5.1 million in 2006.

    Henderson’s salary was raised to $1.8 million from $1.3 million in March with his appointment as president and COO, the No. 2 position to Wagoner.

    Vice Chairman Bob Lutz’s compensation rose to about $9 million in 2007, from about $5.1 million in 2006. The product chief’s salary was raised to $1.75 million, from $1.3 million.

    The issue of executive compensation in the struggling U.S. auto industry has become something of a hot-button issue because of the United Auto Workers union.

    A report earlier in April that Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) Chief Executive Alan Mulally had earned more than $22 million in 2007, drew a sharp rebuke from the UAW as excessive, given concessions UAW members had agreed to in the 2007 contract.

    Ford, which posted a $2.7 billion loss in 2007, reported a first quarter profit on Thursday that surprised analysts.

    ….SOB..SOB…SOB

  7. So all they had to do was throw out the big shots and they wouldn’t have had a loss. lol.

    Seriously, we will carry on letting them dip in the cookie jar and eventually we will be forced to say NO and then they will go bankrupt and restructure. And everybody will have to give. If not, everybody will be unemployed. I’ve seen unions not give an inch and when the plants close, the union is gone and the people end up working at Home Depot selling plywood. As for the CEOs, they are a lot like School superintendents who bounce around from one district in one state to another district in another state. Eventually, they become persona non gratis.

    Looks like Ford is the only one that has the potential to be still standing though.

  8. Over at the NYT there are still a lot of people saing the O Man will save us…save us, O Man…he is so smart, so handsome. Americans are stone idiots! Me and thee excepted.

  9. By the way, the repo man was screwing around his the chains and flatbed outside my window at 4 am! Have they no regulations. Guess not. (Not our car, we don’t have anything for them to get.)

  10. Park here’s on for you. GM says they lose money on ever car the sell. No matter how many they sell they can never make a profit.

  11. Yo, dead,

    And I believe it! Guess THAT’S why Oblahblah is bailing these guys out, huh?

    Takes an idiot to bail out an idiot, I guess…

    -MS

  12. Ummm, if GM loses money for every car they sell, then it can’t be long before someone (barky) comes up with the “notion” of paying GM NOT to sell cars, right?

  13. kq, according to them, they lose 2K on every car. I mean, how the hell would anybody with a brain want to stay in business under those circumstances?

    As it stands you can’t buy a car from them with comparable options that come STANDARD on Japanese cars…without paying way more for it. Toyota has like seven options and GM has thousands of options. It’s just crazy. In the end, the Japanese car is less expensive and since we all know they last far longer and have better repair records, it’s a no brainer.

  14. Re: REPOS. Star, how else can they repossess a car? I am sure the owner isn’t going to turn it in with the keys. And some might get violent. So repo trucks are the only way it can be done. Otherwise, people would just stop paying and get themselves a free car. Shhhhhhhh, don’t give our government any ideas.

  15. With the new cap and trade regulations and the taxes they want to add on anything remotely related to fuel, there is no way our auto companies can compete. It would take way too much money to re-tool. And we keep giving them money to plug away as is. There has to be a reason for this. Perhaps they are trying to make us throw up our hands, after we’ve given them kazillions, and demand that the government buy them. Then everyone that works for the auto industry now has a federal job.

    Back to the dependence issue….we’ll never vote them out with a large majority dependent on them.

  16. I think they should do it at some time other than 4 am…I was awake the rest of the nite. I suppose they have to so outraged people won’t attack them…

  17. Hmm. What do you suppose would happen if I walked into a bank and asked for a loan to start a business which sold widgets that cost $2 to make for $1.75 and told ’em I planned to make up the loss by selling high volumes? How f’&^%$#n hard do you think they would laugh at me?

  18. ROFLLLLLLLLLLLLLL GG.

  19. I purchased a Datsun B210 in 1976 for $3500. I drove the car for 29 years! Had planned to replace the car when I retired, but found that because of the tariff imposed on foreign imports, which were to help the US auto market…the prices were more than I cared to pay. Also, the cost of US cars was ridiculous as far as I was concerned. Instead of pricing US cars at a competitive rate, the US automakers added thousands of dollars to their cars w/o really add to the value. So, I opted for paying $700 to the Datsun car repair people and had everything done on my B210 that needed doing…and was able to keep driving the car for 10 more years!!!

  20. UppityWoman wrote February 27th, 2009 at 11:29 AM Said:

    So all they had to do was throw out the big shots and they wouldn’t have had a loss. lol.

    Not in the least is it just a matter of throwing out the “big shots”, but a matter of being fair by ALSO reporting the incomes of the CEOs and COOs and VPs, etc., who have their hands out for government taxpayer money…while taking in millions in bonuses….while the MSM still only reports over and over and over about the “obscene” wages of the autoworkers and the retirees health plan. All the emphasis has been continually put on the wages and health benefits of the autoworkers, who did not make the decisions which have caused the billions of dollars of debt of the auto companies. Those who made the decisions that have bankrupted the industry are getting millions of dollars in salary and bonus. This is NO laughing matter.

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