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11/07/2008 07:16 PM ID: 74635 Permalink   

Running on Empty: GM's Cash Redlines


GM, the largest auto maker in the U.S., has announced that it had a quarterly loss of $4.2 Billion dollars, up from a loss of $1.6 billion one year earlier. The loss, equaling $7.35 per share, was far greater than analysts' predictions of $3.70.

However, the worst news of the report was GM's cash position, which GM stated it had spent $6.9 Billion of reserves in the quarter and warned that it will "approach the minimum amount necessary to operate its business" this quarter.

Observers say that if GM is not able to convince the US Congress for a bail-out package, it will be forced into bankruptcy. GM has also announced cash burn reduction measures. Shares fell by 16% after the announcement. GM has lost $72B since 2004.

    WebReporter: Mister crank Show Calling Card      
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  Thats funny...  
The big 3 just got 25 Billion in funds ( )and GM has already went through it.
  by: qwerty017   11/07/2008 08:18 PM     
  Another Corporate Welfare Bailout coming...  
It will be supported equally by republicans and democrats alike. After there is no difference between their flavor of socialism. Its all about corporate welfare and nothing to do with the american people.

Its all about the new world order. If you aren't ultra rich then you aren't invited into their club. Hell they wont even tell you what their ideas are! If you try to expose them they call you a "conspiracy theorist"!

IE: The SPP is denied to even exist even though Bush, the PM of canada and the Pres of Mexico have attended!!!

And they are still not satisfied. They want more and more money and more and more power, until the entire world is in a state of indentured servitude...
  by: slavefortheman     11/07/2008 08:40 PM     
  They haven't quite  
gotten a bailout. The $25 billion they just got was allocated last year, and is earmarked to be used ONLY for R&D for more fuel-efficient technologies. So, they haven't really "burned through" that money, and really, they just received it.

Just so we're clear, I am not in favor of giving the big three a real bailout. They are poorly run businesses that have not or will not change with the market. That's the way the world turns, though I do feel bad for all the workers that will be affected by a failure, and it would surely have ripple effects on the rest of the economy.
  by: nephew     11/07/2008 08:49 PM     
  Sheer incompetency  
These fools throught they could run a business on rebates and gas guzzlers, but the truth has finally met with their business.

I feel sorry for all who will lose their jobs.
  by: H. W. Hutchins   11/07/2008 09:15 PM     
its more complex than that. a ways back union reps were negotiating ridiculous terms e.g. medical for life of retirement etc. GM told them they will bring the company down, but reps just said GM is lying and that these rich bastards just want to keep all their money. several years later GM is about to go down.
  by: RyanB     11/07/2008 10:11 PM     
  It's funny...  
It's funny that the car companies are running out of money but the gas companies are showing record profits.
  by: elderban99     11/07/2008 10:22 PM     
There is no possible way that all their woes are union related. If anything most of their problems can probably be attributed to shoddy management and wasting money on go nowhere products. Such as HW, investing in large trucks and SUV's when the market was clearly demanding fuel efficiency.

They are hurting because they made poor business decisions. No way you can possibly blame this one on unions and their benefits packages. Thats probably a drop in the bucket compared to the costs from the real money losers.

Hell is it any wonder GM and Chevy dealers are going out of business in record number! Its probably because people arent buying the vehicles... And why arent they buying??? Because they are overpriced gas guzzlers.

Why is Toyota and Honda doing so well??? Because they adjusted to market demands.

Its nothing to do with labor and union packages and everything to do with horrible management decisions.

I wont be surprised if they go out of business. Hey that is what business is all about. Survival of the fittest. You make stupid decisions, you will fail.
  by: slavefortheman     11/07/2008 10:38 PM     
GM killed the electric car to make Hummers. The electric car work too well, they only need to have windshield wiper fluid added and rotate the tires every 3000 miles. Just think how up there in the money would they have been if they didn't kill it. Now look at all the Hummers sitting unsold.
  by: thedrewman   11/07/2008 10:46 PM     
  Sorry but...  
As a union officer where i work I can honestly say that the union is the cause of the problems at GM. If the union I belong to tried to enforce a contract as ludicrous as the ones in place at GM I'd be out of a job too. Starting salaries of $50,000 even for the guys working as janitors, permanent health insurance for you and all members of your immediate family at no cost to you, and retirement benefits that are just redicoulous. I'm all for fair pay and benefits but the union at GM tends to blackmail the company into unsound contracts that can't possibly make business sense. Any respondsible union boss would realize that making a company unprofitable through contract demands has a lot worse outcome than having to pay for your own health care for example.
  by: arkan351   11/07/2008 10:47 PM     
  Innovative Solution  
If the government wants to bail out Ford or GM, let's get double our money by requiring the company to produce only hybrid and electric vehicles going forward. That way our taxpayer investment at least goes towards developing technologies to move us towards energy independence.

-<a href="">jmanley</...
  by: jmanley   11/08/2008 03:10 AM     
  The last GM vehicle I purchased....  
started out at 15mpg and withing a year had deteriorated to 6.7mpg. It was a mini-pickup that was getting worst mileage than a 5 ton uni-mog. GM refused to even acknowledge that there was a problem let alone fix it. I was even dumb enough to buy the 5 year warranty. F these A-holes. I will never buy another GM for as long as I live. You dug your grave, now you can lie in it and I will be happy to tell the world. NEVER BUY GM PRODUCTS.

I can't believe how their cars just get uglier by the year. In the 70's a Malibu was a nice looking car. Now it is an ugly little box. They keep building huge trucks and cars that get horrible mileage and they think people will just keep buying them. Drop dead GM, you are too stupid to remain in business and I don't want one cent of my tax dollar to be used to bail your worthless asses out. Refund the money you stole from me and then we may talk....may.
  by: valkyrie123     11/08/2008 02:57 PM     
  The last GM vehicle I purchased...-7 nb  
started out at 15mpg and withing a year had deteriorated to 6.7mpg. It was a mini-pickup that was getting worst mileage than a 5 ton uni-mog. GM refused to even acknowledge that there was a problem let alone fix it. I was even dumb enough to buy the 5 year warranty. F these A-holes. I will never buy another GM for as long as I live. You dug your grave, now you can lie in it and I will be happy to tell the world. NEVER BUY GM PRODUCTS.

I can't believe how their cars just get uglier by the year. In the 70's a Malibu was a nice looking car. Now it is an ugly little box. They keep building huge trucks and cars that get horrible mileage and they think people will just keep buying them. Drop dead GM, you are too stupid to remain in business and I don't want one cent of my tax dollar to be used to bail your worthless asses out. Refund the money you stole from me and then we may talk....may.
  by: valkyrie123     11/08/2008 04:45 PM     
  We're going broke  
Face the facts everyone! The government will give big business WHATEVER it wants. This means we will more then likely end up giving them cash to stay afloat... don't kid yourselves.

How much giving will people tolerate? one day they will need slaves to keep profit up. You, me, and your kids. GG America it was a good run, hello AmeriKa.
  by: Trevelyan   11/08/2008 08:09 PM     
  They should sell to Warren Buffet  
and leave our tax dollars alone.

@slave: I agree that labor unions are not their only problem but they are very high on the list. In almost every business requiring employees and materials labor is the most expensive component. Add labor unions and the cost goes up even further. This isn't somenthing I heard or read, it's the truth from my personal experience and that of friends in various businesses.

Again, I have no sympathy for GM or any other failing business for that matter but to make a blanket statement such that you did is quite simply uninformed speak.

  by: bbeljefe     11/09/2008 12:43 AM     
  @slavefortheman and HW  
are you two blind??

it has EVERYTHING to do with the unions!!

they are paying for 4 times more people that dont work for them then they have working for them at this time.
thats salary and medical.

the unions ran these companys into the hole and always demanded more, while striking when they wouldnt get there way AND NOT CARING THAT THIS IS RUNNING THE COMPANIES INTO THE HOLE.

most of these pensions were made back in the day when gm had over 1 million workers and there was no overseas competition, they never could guess that they would have overseas competition and that they never factored the costs of all these people retiring because they were cash cows back in the day..

infact you can sit here and blame SUVS and gas guzzlers but they make MANY great MPG efficent cars, people who bought SUVS and gas guzzlers do so on THERE OWN CHOICE now GMs. there recent marketing is based on MPG, they are shutting down SUV factories and producing more fuel efficent cars.

you cannot sit there and blame them for producing cars that the public wanted,if people want SUVS AND gas guzzlers then let them have them, how dare you try to decide what the consumer should drive, its called a free market, and GM sees that and have made adjustments and great cars to compensate, you two are just too blind to understand a simple market.

espeically for you two to be simply so blind to NOT connect this to there pensions, do you not understand how having 3-4 times more employees you have to pay for that DO NOT WORK FOR YOU OR DO ANYTHING FOR YOUR COMPANY then you actually have working for you and doing a job for you is a huge problem and is the reason why toyota and honda do so much better, they dont have to worry about pensions or anything like that..

oh and PS toyotas and hondas profits also plunged.

GM and fords problems are in there pensions, giving them more money ISNT GOING TO DO ANYTHING until you SOLVE THE REAL PROBLEM, they will burn through it just as fast.

we need to let GM go bankrupt so they can get out of these pensions, atleast give there employess something but for GM to survive they simply cannot do so with these pensions on there books.

Ford has already cut bank and sold certain brands but they are still losing, the only way for these 2 companies to survive is to let them go bankrupt so they can get out from under the pensions thats bringing them down.

they both make great cars that are reliable and fuel efficent.
i have never owned a import and current drive a GM luxury V8 and enjoy it very much, i allmost got a 300c hemi instead but went with the GM.
  by: cray0la     11/09/2008 09:20 AM     
  toyota and honda  
make gas guzzler SUVS and trucks too.

there is a market for large pickups and such, hunters and workers love pickups, while familys love there SUVs to haul the family around.

GM has come a long way with hybrid technology, they even have hybrid yukons and esclades now getting 20 mpg in the city and allmost 30 mpg HWY, this is in a huge suv, the escalade would normally get 13 mpg in the city,

there hybrid malibu is great and gets over 30 mpg, there cadillac was named car of the year.

GM makes great cars, they just need to get out of these pensions to make a profit,

go to and look at there fuel efficent cars, theres many of them
  by: cray0la     11/09/2008 09:26 AM     
if people wsnt gas guzzlers then why are they not buying them? If people did want the cars like you say them GM and Ford would be doing great. The top selling cars are the imports. Why? Because people want to buy them.
  by: Jaded Fox     11/10/2008 04:11 AM     
  about crayon  
I wonder if Rush Limbaugh knows that his biggest supporter is completely illiterate?

  by: bbeljefe     11/10/2008 04:19 AM     
GM products still suck compared to European (Germany) and Japanese.
  by: ukpunk1   11/10/2008 08:37 AM     
  Don't Care  
I find it hard to care about this. Now sure in the big scheme of things GM could cause a lot of pain to a lot of workers, but ultimately they are responsible for their own misfortune.

They own more makes and models than you can shake a stick at. And you just can't do that these days. Cars cost tens of millions to design> If you own Hummer, Buick, Saturn, Pontiac, GMC, Chevy, Cadillac, Dodge, and so on, you simply can't invent enough vehicles at a reasonable enough and cost effective price.

GM needs to shrink quickly, 2-3 brands is quite enough. They need to concentrate on quality, depreciation (lack thereof), reliability, and desirability.

The fact is, I would never dream of buying a GM car because I think they are unreliable shit, and I know they depreciate like crazy.

On top of that I really have a problem with the way they have acted as a corporation. Shipping parts production to Canada, and assembly to Mexico, screwing thousands of Americans in the process. Yet trying to pretend to be American.

Right now their CEO gets about $5m a year. Has a pension worth nearly $20m, and when he retires he can expect $15m as a golden hand shake.

My question is how they can justify this? The company has been hurting for years, and totally sucking for a decade. Yet their leader, the man currently responsible for this debacle, is getting rich.

What ever happened to paying people based on their job performance?

If all GM want is a CEO that can hemorrhage money I can do that! Heck, I'll work at half the price of their current CEO. It's not like I could do a worse job.

So it sucks for the economy and American workers, but from a corporate point of view these idiots have been asking for it for years now. And when they are all but out of money they try and blackmail the government into turning over billions in tax payer's money in the form of a bail out package.
  by: ZCT     11/10/2008 09:00 AM     
so i cant read?

i think your the one with the issues,
so what i dont use a spell check?

deal with it..


im sorry i still think they make great cars better then ever, there not that unreliable as you think, your thinking to the early 90s gm and your stuck there

i own a gm luxury car with a northstar and its a great piece of machinery, reliable and well worth the money.

if you take a look tho, there is a surviving auto industy.....

  by: cray0la     11/12/2008 08:43 AM     
  Unions are always to blame...  
It is far to easy to blame the unions for a corporations troubles. It is far to easy to say GM, Ford, and Crysler make crappy cars. In the end the fact is that there are too many car makers in the world, too many that can use overseas workers working for 25% of what a North American needs to live on.

Canadian and American car buyers wanted SUVs, 4x4 pickups, highpower luxury cars, that is what was selling, that is what people where buying. Toyota, Honda, VW, all are losing money - the only one that hasn't is suzuki.

If the car makers can dump thier pension responcibilities, what may I ask will those retired workers do? How will they support themselves? Isn't the state going to have to pay either way?

I don't know what the answere is, but letting the big three die because of some temporary gasoline price spike, which bytheway is already over, would be stupid. Ford, GM, and Chrsyler make cars and trucks that are everybit as good as the Japanese or the Germans. I have owned vehicles from most of the major makers, and I can't say that one was "better" than another. The quality, reliability, and drivablility was pretty much the same for all of them. In fact the NA models tended to be easier and cheaper to fix.
  by: archeon of thrace   11/14/2008 02:02 AM     
i believe that GM have way too many brands, i don't think this is the source of there woes. Alot of those brands just share cars between them selves to make up there model lists. For instance Australian's holden commodore is re badged and sold as Chevrolet Lumina in the middle east in Brunei, Fiji and South Africa, to Brazil as the Chevrolet Omega and to North America as the Pontiac G8. Daewoo sells cars under the holden brand name as captiva and epica. All they are doing is sharing there products within them selves. I would have to say the build Quality is utter crap but, i worked within the fleet industry as an analyst and i have to say that GM & Fords based cars had poor build reliability, even my boss' brand new $60,000 V8 commodore was received with the passenger door handle not operating and the air bags disabled. My girlfriends dad just bought a holden caprice for $80,000 within a couple of weeks the aircon stopped working the gps failed, these are little things but the damage consumer confidence, you can buy holden commodore and ford falcon for $45,000 and a Toyota Avalon for $38,000 and within a year the price of the ford and the holden have depreciated so much that the Toyota is now worth more. When i went to purchase a car i steared clear from holden and ford as they just don't keep there value and they are not very reliable, Mazda(even thought it's kinda ford), Toyota & Honda kept there value. Mitsubishi while not holding it's value great is dirt cheap so it kind of off set the resale, and there new lancer looks nice and is selling well(which should mean that resale for it aren't that bad) same goes with Suzuki they are cheap and reliable.
  by: shiftyfarker   11/14/2008 03:21 AM     
  Well, I didn't think it'd come to this...  
I agree with Crayola.

The UAW has completely crippled the Big 3 (like everyone said they would). If GM doesn't do something about it, they'll continue hemorrhaging money that they don't have. If GM declares bankruptcy, drops the union, drops the pensioners (sorry, guys), sells off some brands or consolidates them, and does some serious restructuring they could make a comeback as a leaner, actually profitable company.

That being said, I've already made a deposit on a Camaro and placed my order. If GM goes under before I get it, I'll have an aneurysm.
  by: erasedgod   11/14/2008 07:09 AM     
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