GM Loses $15.5 Billion in Second Quarter

[lamebums]

Pressure to turn around increases as sales of gas-guzzlers collapse

John D. Stoll and Neil E. Boudette - Wall Street Journal - August 2, 2008

Rows upon rows of unsold pickup trucks sitting at dealerships across the nation.

How did GM succeed in losing more than ExxonMobil made in profit? - Ed.

DETROIT -- General Motors Corp., in another major blow to its turnaround effort, on Friday reported a $15.5 billion net loss for the second quarter.

The huge quarterly loss -- the third-biggest in GM's history -- marks the latest chapter in the long, rough slide of the auto maker, a company that once dominated the world automotive industry. It comes at a time when the entire business is in turmoil amid the U.S. economic slowdown. GM and its two Detroit rivals are being forced to ratchet back or phase out their leasing programs, long a linchpin of sales, because declining car values are undermining the economics of the business.

But even foreign brands are skidding. Nissan Motor Co. said Friday that net profit fell 43% its fiscal first quarter, as increased sales to emerging markets failed to make up for the negative effect of a stronger yen and a downturn in the U.S. market. BMW AG, also hurt by the weak U.S. market, reported second-quarter profit fell 33%. A week ago, Ford Motor Co. posted a second-quarter loss of $8.7 billion.

GM's performance, which was worse than analysts expected, increases the pressure on Chairman and Chief Executive Rick Wagoner to show he can steer the company back to profitability. From 2005 to 2007, GM lost a cumulative $50 billion. In the first two quarters of 2008, it has lost an additional $18 billion.

In the U.S. market, GM has been hurt by the sharp drop in sales of trucks and sport-utility vehicles as consumers seek shelter from high gasoline prices by shifting to small cars and more fuel-efficient vehicles. Lower truck sales caused a $9.9 billion decline in GM's North American revenue, to $19.8 billion from $29.7 billion. On Friday the company said U.S. vehicle sales in July fell 26%…[Read More]

[Indigo]

And yet, GM refuses to include smaller, fuel-efficient cars in their North American lineup. The Aevo can't compete against the Fit or Yaris because the Aevo is a piece of crap. GM's Cobalt is nice, and they need more vehicles in this price/FE category. GM's hybrids are a joke. You have a choice of BAS (giving a whopping 1 MPG increase) or the fabulously overpriced 2-Mode (abailable only in luxury guzzler-hulks).

GM seems unintrested in building something equivalent to the Prius or HCH (ie. a $24k hybrid that gets 40-45 MPG). I have no idea why, since there are waiting lines for vehicles such as this.

[Earthling]

Wow, GM can't even make money leasing cars because the depreciation is killing them. In contrast, I saw an article in a newspaper yesterday that said I could sell my used Prius for what a new one cost. Gas hog = punishing depreciation; Prius = no depreciation. I am so glad I got my Prius when I did.

GM, you are getting what you deserve, for pushing gas hogs and failing to plan for higher gasoline prices.

Harry

[Xringer]

Some of that GM stuff should be saved, just in case...

http://www.berkshires.com/features/detail.php?id=7

[Chuck]

Exxon may be doing well now, but time is not on their side, either.

Not only is cheap oil running out, it's running out faster in politically stable and friendly areas. This is the time for Exxon/Mobil to expand into alternative energy like T. Boone Pickens is. Otherwise, Exxon likely will end up like the railroads....they were fat and happy in the late 1800's, but sat on their empire while customers went from trains to trucks and airlines to transport their goods.

[Jimmy]

I'm not at all surprised. Looking back at the EV-1s that GM gathered up, took to the desert, and then destroyed shows a certain mindset. Then the fact that the Hummer is still sitting in dealership showrooms and are not being destroyed, even though they are not being sold and are the worst gas hogs ever made, shows the same mindset again.

So what, exactly, is GM showing by these actions, or lack thereof?

The answer: GM is determined, at all costs, to stay with high consumption fossil fueled vehicles, no matter what it cost the consumer or our environment.

We need a change.

[roadrunner]

"GM's performance, which was worse than analysts expected, increases the pressure on Chairman and Chief Executive Rick Wagoner to show he can steer the company back to profitability. From 2005 to 2007, GM lost a cumulative $50 billion. In the first two quarters of 2008, it has lost an additional $18 billion."

So a total of $68 billion lost, and too many FSP's on the lots! I would love to know when they are going to run out of cash. If they are borrowing, what % are they paying while doing so poorly? It appears they are in trouble, just like Ford and Chrysler.

[roadrunner]

This is from Fortune Magazine

GM's downward spiral: A timeline

The Detroit automaker's whopping $15.5 billion quarterly loss Friday wasn't a record, but it's the latest chapter in a steady slide that began more than 20 years ago.

http://money.cnn.com/galleries/2008/...une/index.html