GM posts biggest annual US auto loss; Will continue making shitty cars

[The Ozzman]

GM Posts Biggest Annual US Auto Loss
Tuesday February 12, 9:14 am ET
By Dee-Ann Durbin, AP Auto Writer
GM Posts Record US Automotive Loss of $38.7B for 2007

DETROIT (AP) -- General Motors Corp. reported a $38.7 billion loss for 2007 on Tuesday, the largest annual loss ever for an automotive company, and said it is making a new round of buyout offers to U.S. hourly workers in hopes of replacing some of them with lower-paid help.

The earnings report and buyout offer came as GM struggles to turn around its North American business as the economy weakens.

But GM Chairman and Chief Executive Rick Wagoner said that the company made significant progress in 2007, reducing structural costs in North America, negotiating a historic labor agreement and growing aggressively in Latin America and Asia.

The Detroit-based automaker said it was offering a new round of buyouts to all 74,000 of its U.S. hourly workers who are represented by the United Auto Workers.

GM won't say how many workers it hopes to shed, but under its new contract with the UAW, it will be able to replace up to 16,000 workers doing non-assembly jobs with new employees who will be paid half the old wage of $28 per hour.

Ford Motor Co. and Chrysler LLC already have announced similar buyout offers.

GM shares fell 71 cents, or 2.6 percent, to $26.41 in premarket trading.

GM's annual loss of $38.7 billion largely was due to a third-quarter charge related to unused tax credits.

The 2007 loss topped GM's previous record in 1992, when the company lost $23.4 billion because of a change in health care accounting, according to Standard & Poor's Compustat.

Excluding the tax charge and other special items, GM lost $23 million, or 4 cents per share, for the year, compared with a net income of $2.2 billion in 2006, beating Wall Street's expectations. Analysts polled by Thomson Financial expected GM to post a full-year loss of 95 cents per share.

For the fourth quarter, GM posted a loss of $722 million, or $1.28 per share, in the fourth quarter, compared with a net income of $950 million in the year-ago quarter. Fourth-quarter charges included $622 million to Delphi Corp., GM's former parts division, for its restructuring efforts.

GM reported $181 billion in revenues for the year, down from $206 billion in 2006. Its automotive business saw record automotive revenues of $178 billion in 2007, up $7 billion from a year ago thanks to growth in emerging markets and favorable exchange rates.

GM was profitable in every region outside North America. GM's Latin America, Middle East and Africa division reported a record $1.3 billion in earnings, up 140 percent from 2006. GM's Asia Pacific division earned $744 million, up from $403 million in 2006, while GM Europe reported a profit of $55 million, down from a profit of $357 million in 2006.

But GM's North American division continued to struggle, posting a $1.5 billion loss for the year, nearly identical to its $1.6 billion loss in 2006. GM's North American division also reported a loss of $1.1 billion in the fourth quarter, compared with a loss of $129 million in the year-ago quarter.

Wagoner said the weak U.S. economy and high commodity prices hurt turnaround efforts in North America. He said GM's decision to reduce low-profit sales to daily rental companies by 110,000 in 2007 also affected U.S. sales.

"We're pleased with the positive improvement trend in our automotive results, especially given the challenging conditions in important markets like the U.S. and Germany, but we have more work to do to achieve acceptable profitability and positive cash flow," Wagoner said in a statement.

GM's results also were dragged down by its 49 percent stake in GMAC Financial Services, which lost $2.3 billion in 2007. GM reported a $1.1 billion loss attributed to GMAC.

GM barely retained its title as the world's largest automaker in 2007, selling just 3,000 more vehicles than Toyota Motor Corp. GM sold a total of 9,369,524 vehicles worldwide, up 3 percent from the year before.

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[waif]

Cars suck.

 

[The Ozzman]

Cars are one of the best inventions ever.

 

[The Ozzman]

I predict either Toyota or Nissan will buy GM within the next few years.

 

[King Richard]

Fuck GM, Ford, and Chrysler. That's what they get for making shit cars.

 

[The Ozzman]

Fuck GM, Ford, and Chrysler. That's what they get for making shit cars.

Notice the thread title, eh?

I think the only car I would buy from any US auto maker is the Ford F-150

 

[King Richard]

I don't think Nissan could afford to buy out GM. Honda might be able to, but I hope no one does.

 

[The Ozzman]

I don't think Nissan could afford to buy out GM. Honda might be able to, but I hope no one does.

Yeah, the signal that would send to other economies in the world would be devastating.

I think Toyota has the best chance of buying out GM, tbh. Toyota is now the #1 car maker in the world after surpassing GM last year. Though, I would say an offer to buy will probably come from Asia in general before any other car maker (Benz, BMW, etc)

 

[King Richard]

Most likely. The Japanese like America for a plethora of reasons, mainly that it's cheaper to produce vehicles here. Honda is building a manufacturing plant about an hour from my place.

 

[The Ozzman]

Most likely. The Japanese like America for a plethora of reasons, mainly that it's cheaper to produce vehicles here. Honda is building a manufacturing plant about an hour from my place.

There are plants everywhere here. There is a Toyota plant about 45 minutes from here and a Honda plant about an hour from here as well. On the flipside, there is a Ford plant that produces transmissions about 5 minutes from me.

Anyway, Toyota has the best chance of buying out GM if we're talking about a foreign car maker. Over 13 billion in income and over 100 billion in assets.

I think if Ford and GM merge, though, they might have a shot at competing with the Asian car makers.

 

[unknown]

hooray for outsourcing!

 

[The Ozzman]

They aren't really outsourcing. They are trying to hire cheaper labor within the states.

 

[ThisIsACoolName]

Should have gone in the news thread tbh. [/ender]

 

[Jean-Pierre]

I highly doubt this will lead to more jobs IN the states, but we'll see. Coming from Detroit and seeing the worst of this, the whole deal will just be bad.

 

[The Ozzman]

I highly doubt this will lead to more jobs IN the states, but we'll see. Coming from Detroit and seeing the worst of this, the whole deal will just be bad.

Well, it will be a zero-sum factor here since all those people will be replace, but there would be more money in GMs bottom line since they'll be paying them half the money. You're right though, this won't be good for Michigan's economy at all.

 

[Dazed and Brutal]

Ford Trucks FtW!

 

[The Ozzman]

Trucks are probably the only thing worth buying from Ford these days

 

[cookiecutter]

 

[MasterOLightning]

What would really help the automakers would be a national health care system that takes their massive health care expenses off their books.

That, and less reluctance to build hybrid cars.

They've been digging their graves for a long time by dragging their feet on this one.

 

[The Ozzman]

What would really help the automakers would be a national health care system that takes their massive health care expenses off their books.

Please don't derail my thread into a discussion about healthcare. That's happened enough times already in other threads. Thanks.

I honestly think it's the unions that are the cause of all these problems, not the health care costs, but that's another discussion entirely


However, reluctance to embrace new technology will hurt many industries, including auto makers.