Ahem, tea partiers…you guys eat crow again. NEW YORK (CNNMoney) – General Motors reported its best quarter in at least six years Wednesday, setting the stage for the automaker to begin selling shares to the public once again. GM reported it earned $1.96 billion in the quarter, compared to a loss a year earlier when it was still in the process of emerging from bankruptcy. It’s the third straight quarter that the automaker has reported a profit after a string of losses that date back to the start of 2005. Email Print CommentThe results were in the middle of the earnings range the company signaled last week, when it said it would earn between $1.9 billion and $2.1 billion. The details released Wednesday showed most of the profit coming from its North American operations, where it made an operating profit of $2.1 billion. The international unit, which includes China, earned $646 million, but that was balanced out by a loss of $559 million in Europe. The company now sells more cars in China than it does in the United States. The company said it expects to be profitable again in the fourth quarter, although it cautioned income would be a “significantly lower run rate” than it earned in the first three quarters of the year. It cited a different production mix in the fourth quarter. Also cited as reasons the fourth quarter will be weaker were new vehicle launch costs, particularly for the Chevrolet Cruze and Volt, and higher engineering expenses for future products. 0:00 /2:55Detroit’s Big 2 battle: Ford vs. GM The earnings report came about a week before GM will start selling shares to the public for the first time since it emerged from bankruptcy in July 2009. The company expects to raise about $13 billion selling shares, putting it on course to be the third-largest initial public offering in U.S. history. That stock price target would value the company at about $52 billion, comparable to rival Ford Motor (F, Fortune 500). Most of those stock sale proceeds will go to its existing shareholders, not the company, with the U.S. Treasury Department receiving a bit more than half of the shares. Treasury, which provided a $50 billion bailout to keep the company alive through its bankruptcy process, holds 61% of its common shares today, although that will fall to just over 40% once the initial sale takes place. Treasury intends to space out the sale of its remaining GM shares over upcoming years so as not to flood the market with shares and drive down the price. Whether taxpayers make a profit on GM’s bailout will determine the price Treasury receives when it sells those additional shares, but it will take a nearly a doubling in share price from the initial price target in order for taxpayers to break even.
funny how before an IPO the company is doing so well…its still a crap company…just interested to know how they’re inflating numbers…let me take a stab though, chinese sales are lower than previously reported due to accounting treatment of selling cars they didn’t sell.
We should all be considering the point of reference. Looking only back at the worst period in the company’s long history and saying that we are better than that is not necessarily the same as saying that GM is doing “well”, it’s just not doing quite so poorly.
I don’t know if GM is necessarily a “bad” company today (though they clearly were a bad company until a couple of years ago). It just pisses me off how that they have so much influence in the government. The Secretary of Transportation is married to a GM lobbyist. How does the Chevy Volt gets an $8000 subsidy? And of course, there is all the weird stuff that goes on with the autoworker unions. I mean seriously, wtf?
In my opinion, GM still produces inferior cars to the rest of the world at higher costs. Until the Company can produce cars that people want to buy (without the ridiculous subsidies), the Company will struggle to remain competitive in an extremely competitive industry.
Not sure why you support the GM bailout so much. Assuming you’re basing everything on how the company has turned around to be profitable, you should jumping for joy over the bank bailout. The way the whole auto bailout went down was such a disgrace. Watching the CEO’s and gettlefinger speak was awful.
thommo77 Wrote: ------------------------------------------------------- > In my opinion, GM still produces inferior cars to > the rest of the world at higher costs. Hmm… I guess this is true and untrue. GM is good at making some high end cars (Corvette, CTS), and is good at making cheap crappy cars that sell by the millions in Asia. For instance, the Chevy Aveo is a piece of sh*t by US standards. However, it’s a popular car for the low price point of people in less affluent countries. So, part of the issue is just lack of variation between models targeted for different markets.
ohai Wrote: ------------------------------------------------------- > I don’t know if GM is necessarily a “bad” company > today (though they clearly were a bad company > until a couple of years ago). It just pisses me > off how that they have so much influence in the > government. The Secretary of Transportation is > married to a GM lobbyist. How does the Chevy Volt > gets an $8000 subsidy? And of course, there is all > the weird stuff that goes on with the autoworker > unions. I mean seriously, wtf? The Nissan leaf ins not only getting a $8000 subsidy from the feds, it is getting an additonal 5K from the California state govt. and a further 3K from some city governments. So almost a 50% subsidy.
CFABLACKBELT Wrote: ------------------------------------------------------- > Not sure why you support the GM bailout so much. > Assuming you’re basing everything on how the > company has turned around to be profitable, you > should jumping for joy over the bank bailout. > > The way the whole auto bailout went down was such > a disgrace. Watching the CEO’s and gettlefinger > speak was awful. Because the entire midwest would have gone into a full blown depression. Not only GM but all the suppliers in the area would have gone out of business. The same suppliers that also produce parts for Ford and Toyota.
marcus phoenix Wrote: ------------------------------------------------------- > CFABLACKBELT Wrote: > -------------------------------------------------- > ----- > > Not sure why you support the GM bailout so much. > > > Assuming you’re basing everything on how the > > company has turned around to be profitable, you > > should jumping for joy over the bank bailout. > > > > The way the whole auto bailout went down was > such > > a disgrace. Watching the CEO’s and > gettlefinger > > speak was awful. > > > Because the entire midwest would have gone into a > full blown depression. Not only GM but all the > suppliers in the area would have gone out of > business. The same suppliers that also produce > parts for Ford and Toyota. There is no question that the auto bailout saved many jobs, no one is debating that. But this quote from the article you posted is highly disturbing: “Whether taxpayers make a profit on GM’s bailout will determine the price Treasury receives when it sells those additional shares, but it will take a nearly a doubling in share price from the initial price target in order for taxpayers to break even.” Relative the the Wall St. bailout where the gov’t has received much of its $$ back already. In my opinion, the US auto industry needed a lot more than $$ to restore it to properity, in particular significant changes to its employee unions. There are generations of people that have spent their lives dedicated to GM, Ford, etc., but when the economy is ever-changing, does it really make sense to continue encouraging their folks to follow their fathers and grandfathers into a business that lacks long term survivability??
marcus phoenix Wrote: ------------------------------------------------------- > So if there was no US electric car, do you think the Leaf would still have gotten the same subsidy? GM can’t lobby for a subsidy for only its own cars, but it can lobby for subsidies for narrow categories under which its halo vehicle falls.
BValGuy Wrote: ------------------------------------------------------- > marcus phoenix Wrote: > -------------------------------------------------- > ----- > > CFABLACKBELT Wrote: > > > -------------------------------------------------- > > > ----- > > > Not sure why you support the GM bailout so > much. > > > > > Assuming you’re basing everything on how the > > > company has turned around to be profitable, > you > > > should jumping for joy over the bank bailout. > > > > > > The way the whole auto bailout went down was > > such > > > a disgrace. Watching the CEO’s and > > gettlefinger > > > speak was awful. > > > > > > Because the entire midwest would have gone into > a > > full blown depression. Not only GM but all the > > suppliers in the area would have gone out of > > business. The same suppliers that also produce > > parts for Ford and Toyota. > > > There is no question that the auto bailout saved > many jobs, no one is debating that. But this > quote from the article you posted is highly > disturbing: > > “Whether taxpayers make a profit on GM’s bailout > will determine the price Treasury receives when it > sells those additional shares, but it will take a > nearly a doubling in share price from the initial > price target in order for taxpayers to break > even.” > > Relative the the Wall St. bailout where the gov’t > has received much of its $$ back already. > > In my opinion, the US auto industry needed a lot > more than $$ to restore it to properity, in > particular significant changes to its employee > unions. There are generations of people that have > spent their lives dedicated to GM, Ford, etc., but > when the economy is ever-changing, does it really > make sense to continue encouraging their folks to > follow their fathers and grandfathers into a > business that lacks long term survivability?? Its easy to blame lowly union members - the real problem lies in the incompetent upper management in American automakers. Too greedy, shortsighted and always cutting corners, too much focus on cost reduction instead of improving quality. The same supplier that makes parts for Toyota or Honda is held to a much higher standard in terms of quality for the very same part that is supplied to GM or Ford. With such shabby quality of manufacturing, is it any wonder that the comsumers switched to Japanese and Korean manufacturers? Also as an FYI the execs at the Japanese car companies make on an average 5 times the average worker compared to 40 times for the American CEO of a automotive company. For Japanese automakers the focus is on quality, have a much flatter management structure and use Lean methodologies to derive cost efficiencies without sacrificing quality. BTWcertain Japanese automotive plants in the US are unionized but still deliver excellent quality cars.
marcus phoenix Wrote: ------------------------------------------------------- > CFABLACKBELT Wrote: > -------------------------------------------------- > ----- > > Not sure why you support the GM bailout so much. > > > Assuming you’re basing everything on how the > > company has turned around to be profitable, you > > should jumping for joy over the bank bailout. > > > > The way the whole auto bailout went down was > such > > a disgrace. Watching the CEO’s and > gettlefinger > > speak was awful. > > > Because the entire midwest would have gone into a > full blown depression. Not only GM but all the > suppliers in the area would have gone out of > business. The same suppliers that also produce > parts for Ford and Toyota. That is a terribly misguided and blanketed statement. Have you even been to the Midwest? It has a lot of other industries to support it other than the auto industry. The likely areas to be hurt were cities such as Detroit, Flint, Toledo, etc… that were already in terrible shape. The auto industry in that area has been declining for decades for a variety of reasons (I won’t go into them as that is another topic). Sales for the industry were horribly inflated in the last decade and the financial crisis just exposed what most in the Midwest knew has been a sick dog for a long time. The bailout has not solved any of the fundamental problems with the way business is run in Detroit. The only thing that changed is that government is now more intertwined with the auto industry and is going to prolong the inevitable decline.
marcus phoenix Wrote: ------------------------------------------------------- > CFABLACKBELT Wrote: > -------------------------------------------------- > ----- > > Not sure why you support the GM bailout so much. > > > Assuming you’re basing everything on how the > > company has turned around to be profitable, you > > should jumping for joy over the bank bailout. > > > > The way the whole auto bailout went down was > such > > a disgrace. Watching the CEO’s and > gettlefinger > > speak was awful. > > > Because the entire midwest would have gone into a > full blown depression. Not only GM but all the > suppliers in the area would have gone out of > business. The same suppliers that also produce > parts for Ford and Toyota. Again… you should be ecstatic for the bank bailouts. What the heck do you think would’ve happened if the financial system collapsed?
marcus phoenix Wrote: ------------------------------------------------------- > BValGuy Wrote: > -------------------------------------------------- > ----- > > marcus phoenix Wrote: > > > -------------------------------------------------- > > > ----- > > > CFABLACKBELT Wrote: > > > > > > -------------------------------------------------- > > > > > > ----- > > > > Not sure why you support the GM bailout so > > much. > > > > > > > Assuming you’re basing everything on how > the > > > > company has turned around to be profitable, > > you > > > > should jumping for joy over the bank > bailout. > > > > > > > > The way the whole auto bailout went down > was > > > such > > > > a disgrace. Watching the CEO’s and > > > gettlefinger > > > > speak was awful. > > > > > > > > > Because the entire midwest would have gone > into > > a > > > full blown depression. Not only GM but all > the > > > suppliers in the area would have gone out of > > > business. The same suppliers that also > produce > > > parts for Ford and Toyota. > > > > > > There is no question that the auto bailout > saved > > many jobs, no one is debating that. But this > > quote from the article you posted is highly > > disturbing: > > > > “Whether taxpayers make a profit on GM’s > bailout > > will determine the price Treasury receives when > it > > sells those additional shares, but it will take > a > > nearly a doubling in share price from the > initial > > price target in order for taxpayers to break > > even.” > > > > Relative the the Wall St. bailout where the > gov’t > > has received much of its $$ back already. > > > > In my opinion, the US auto industry needed a > lot > > more than $$ to restore it to properity, in > > particular significant changes to its employee > > unions. There are generations of people that > have > > spent their lives dedicated to GM, Ford, etc., > but > > when the economy is ever-changing, does it > really > > make sense to continue encouraging their folks > to > > follow their fathers and grandfathers into a > > business that lacks long term survivability?? > > Its easy to blame lowly union members - the real > problem lies in the incompetent upper management > in American automakers. Too greedy, shortsighted > and always cutting corners, too much focus on cost > reduction instead of improving quality. The same > supplier that makes parts for Toyota or Honda is > held to a much higher standard in terms of quality > for the very same part that is supplied to GM or > Ford. With such shabby quality of manufacturing, > is it any wonder that the comsumers switched to > Japanese and Korean manufacturers? Also as an FYI > the execs at the Japanese car companies make on an > average 5 times the average worker compared to 40 > times for the American CEO of a automotive > company. For Japanese automakers the focus is on > quality, have a much flatter management structure > and use Lean methodologies to derive cost > efficiencies without sacrificing quality. > BTWcertain Japanese automotive plants in the US > are unionized but still deliver excellent quality > cars. I agree that there are significant management problems at the US automakers. But that doesn’t mean that the unions aren’t also a problem (there can be more than one problem), and really one of the most hindering obstacles that these management teams must deal with. Also consider that the Japaense manufacturers use more than twice the amount of automated robots, which in the long run are cheaper and more efficient than the average union dude.
CFABLACKBELT Wrote: ------------------------------------------------------- > marcus phoenix Wrote: > -------------------------------------------------- > ----- > > CFABLACKBELT Wrote: > > > -------------------------------------------------- > > > ----- > > > Not sure why you support the GM bailout so > much. > > > > > Assuming you’re basing everything on how the > > > company has turned around to be profitable, > you > > > should jumping for joy over the bank bailout. > > > > > > The way the whole auto bailout went down was > > such > > > a disgrace. Watching the CEO’s and > > gettlefinger > > > speak was awful. > > > > > > Because the entire midwest would have gone into > a > > full blown depression. Not only GM but all the > > suppliers in the area would have gone out of > > business. The same suppliers that also produce > > parts for Ford and Toyota. > > Again… you should be ecstatic for the bank > bailouts. What the heck do you think would’ve > happened if the financial system collapsed? I am not estatic but am for the bank bailouts and the stimulus package.