By on February 26, 2009

Somewhere in the background, a White House spinmeister is busy telling the cross-dressing Fox News anchor (if he doesn’t, he should) that his viewers should chill about the $3.6 trillion deficit generated by her boss’ budget. “The average taxpayer knows that this is an investment in America that will reinvigorate the economy and, thus, generate new tax revenues and hey, presto! It will make itself disappear!” Or some such crap. The average person knows his or her government is out of control. They are also increasingly aware that GM is doomed. As I stated in last General Motors Death Watch, as the enormity of this collapse reveals itself (-$3,529,166.67 per hour) the American taxpayer will draw a line in the metaphorical sand. In fact, the coming tussle over the Detroit bailout could be the beginning of the end of Bailout Nation. We shall see. Meanwhile, lightly used Ford GTs are selling for $130K, a 2000 Ferrari 360 is going for $90K and today’s Maserati GranTurismo (or a Quattroporte) can be had for less than $100K. At the low end, prices are also slip sliding away. And yet, it’s still not time to buy. How scary is that?

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35 Comments on “Daily Podcast: GM Loses $84.7m a Day...”


  • avatar
    Happy_Endings

    Using the above figures, GM loses $58,819.45 per minute, or almost $1,000 per second. The median household income in 2007 was $50,223. So, GM loses more in a minute than most households make in a year.

    http://www.census.gov/prod/2008pubs/p60-235.pdf

  • avatar
    psarhjinian

    You know, figures like that sort of turn my opinion of bailing out GM.

  • avatar
    BuzzDog

    Or put another way, GM could cover their losses if every man, woman and child in the United States were to contribute 27.7 cents, each and every day.

    Or about $2 per week, $8.50 per month, or $100 per year.

    Staggering…simply staggering.

  • avatar
    Pig_Iron

    The fact that Robert let his family duties interupt his work impresses me inthat it shows he’s not just a father, he’s a dad.

    Life happens to dads, even when their at work (or out of work).

  • avatar

    What’s the “It’s time to buy” listserv address?

  • avatar
    jerry weber

    This is the highest cost of living a lie that I have ever seen.

    Up until last year, GM continued to churn out the iron to remain number one in the World. It was this hubris that gave us the slogan “too big to fail”. How about “too big to save”.

    By not prudently trimming brands and models, a perfect storm has envelolped them. Who ever thought they could suspend economic gravity by building more and more cars at a loss. That the fire sale every year that GM can proudly take authorship of, would drive out competition.

    Yes GM has it’s perfect storm, whether they are legally bankrupt or not you don’t have to be a college grad-u-ate (archie bunker remember) to know that this company is in fact just that. Many have also found out that buying these fire sale cars and trucks still puts you upside down in the loan as the resale value sinks like a stone.

    GM is now facing the second generation of buyers who have deserted their grandfather’s brands. You think you get that loyalty back with a couple of successful car models? Do you really think that the $40K volt will matter, when toyota just won top honors for their 25K prius with consumer reports?

    As in all competitions, GM is batting in last years world series, toyota et. al. are ready to role out next years products, like a hybrid that is improved and still won’t cost $40K. Game over, let’s put the bailout money where it might matter.

  • avatar

    I propose a line. When I say a line, I mean a spread, a line, a wager, oddsmakers…and I propose it begins right here, let Mr Farago make national news with his position and for TTAC.

    So Robert, do your math, work your stats, and publically take your hard line position.

    We are all anxiously awaiting Mr Farago’s drop dead DATE, the proverbial line in the sand if you will, of the DATE (example May 18 2009) of when GM files for BK. Any BK, the chapter of BK is not the point. The formal download from GM councel to the united states bankruptcy court that awards the family as property of the court.

    What’s the date doctor?

  • avatar

    jwolfe:

    March 31

  • avatar

    So…

    Maserati (Quattroporte or GranTurismo) or Ferrari California?

    Seriously. You (podcasters) bring up the luxury side of Ferrari being Maserati. So isn’t that what the California is for?

    For the record… I’m one of those fools who think the California would be a realistic purchase (and desirable) if I could afford it.

  • avatar
    ConejoZing

    To put things in perspective, I (and yes, sometimes others) pay a little over a thousand dollars a month for my little house. I live so cheaply!

    This kind of money that GM is burning through every day… yow. 84.7 MILLION cash burn?! Um. That’s like… bad.

    Oh yes and someday I must drive something Italian. I eat enough pizza and spaghetti I might as well take the Italian thing into the driving world.

  • avatar
    mikey

    March 31 eh? Gee I hope GM Canada can last 24hrs
    longer.My pension deposit hits the bank on the 1st

  • avatar
    gslippy

    I prefer the $1000/second calculation. I remember doing this calculation last year with my kids at the dinner table, and the answer was the same for 2007. One would think they would have taken steps to help themselves much sooner.

    It won’t be long. Even Congress’ billions in Bandaids can’t stop this hemorraging.

  • avatar
    trd2345

    About the deficit-it’s a terrible situation, but let’s not forget that while your generation is doing the investment it’s MY generation that’s going to have to pay it back.

  • avatar
    RogerB34

    The Detroit issue has NOTHING to do with business, finance, rational decisions. NOTHING. The issue is only one of politics. How many billions or trillions are Democrats willing to spend to keep Detroit running for a few more years? Money doesn’t matter because Democrats control the printing press. In the end Detroit will fail becuase the car market has contracted to the most efficient producers and they are not Detroit.

  • avatar
    trd2345

    @ Roger. That’s very true, but can you imagine the backlash Democrats would experience if they were to let GM fail?

  • avatar
    Usta Bee

    I say nationalize GM and let the government take it over. Instead of making monthly car payments they could just take it out of your weekly paycheck as Federal taxes.

    Also, instead of dealing with car salesmen they could use IRS auditors instead, because those guys are already experience in people fudging numbers and looking for loopholes. They’d fit right in as finance men.

    Finally, the GM service departments could be staffed by U.S. Postal workers. The quality of service would remain the same as it is now through GM, as well as turnaround time to get anything done.

  • avatar
    PJG62

    You know,,, I love this country, the people and the corporations. BUT,,, it is not like GM, Ford and Chrysler haven’t seen all this coming for 40 years or more. Granted things are bad, but the Toyotas and Hondas will make it through it all and prosper while the domestics will continue to be the beggars they have become. Geeezzz,,, we have the talent, technology, and work ethic to beat any one at any thing, but somewhere we have lost our way and refused to see the future and only looked at tomorrows profits. I am seeing a once, great nation being shuffled to the rear of the bus, and it pisses me off, but we deserve it.

  • avatar
    gusplus

    I don’t deserve this.

  • avatar

    GM Employee Sponsorship Fund

    For years we’ve been taking you to GM plants like this and showing you the heartbreak, the workers whose only mistake was becoming a GM employee.

    On average, hundreds lose their job every day.

    But thousands more kept working because of American citizens who made a difference in their lives. And sometimes actually saved them.

    We know you thought about it, put it on a nice to-do list, but somehow never got around to it – even though the phone is right there and the call is free. Maybe it kind of gets lost in how busy you are. Maybe you’re just taking your time.

    But GM employees don’t have ’til the 12th of never.

    It’s not the 28 cents a day is it? That’s all it would take from every man woman and child in America. Sponsoring a GM employee – letting them keep their house, their pension, their healthcare, have clean running water – it’s the best thing that can happen to a quarter and three pennies.

    And it’s not like you’ll feel bad after doing it. You’ll feel great about sponsoring a GM employee every day you get up.

    And you don’t have to worry about the GM executive officers. 80 cents of every dollar that comes in goes right out to help those titans of industry.

    So why not now? Know what I think it is? I think you just forgot the number, so here it is: (313) 556-5000.

    General Motors is one of America’s oldest and most trusted corporate entities. For over 100 years GM has helped you build your future through automobile production, now you can help us build the future of GM.

    So why not now? We’ll send you a picture of a GM employee who needs you along with a letter from them letting you know how your 28 cents has changed their life.

  • avatar
    lw

    I’m good with the March 31st date. Maybe it slips to April 15th, but March 31 won’t be far off.

    I’m guessing that the government will provide massive amounts of cash so that GM can reassemble the supply chain. They will buy back Delphi and hundreds of other suppliers.

    The insanity doesn’t end until the majority of American’s decide it does.

  • avatar
    King Bojack

    “General Motors is one of America’s oldest and most trusted corporate entities. For over 100 years GM has helped you build your future through automobile production, now you can help us build the future of GM.”

    You must be new here and unless you’re being facetious you are totally barking up the wrong tree. Lots of people here can’t stand GM so I don’t think you’ll get much help. Sorry.

  • avatar

    @King Bojack – I have not, perhaps, made myself clear. This should help.

  • avatar
    King Bojack

    Gotcha, I didn’t figure any one would suggest something so outlandish here unless they were kidding somehow. Good joke though.

  • avatar
    galaxygreymx5

    Marcus, that was awesome.

    Does my GM employee come with flies buzzing around his head?

  • avatar
    Stein X Leikanger

    @PJG62
    Geeezzz,,, we have the talent, technology, and work ethic to beat any one at any thing, but somewhere we have lost our way and refused to see the future and only looked at tomorrows profits.

    Yes – a capsule sentence that says it all. Having seen how management has looted US industry, without being stopped, it’s little wonder that this is where we ended up.
    The need to keep shareholders happy was perfectly conflated with the options packages exec’s demanded and manipulated. Executives made more money the less they spent on the businesses they were in charge of, and even more if they bled their customers and employees.
    Moving manufacturing to other countries was an easy decision.
    Not investing in R&D was an obvious one.
    Holding product development back several generations was a requirement.
    Financing their options packages with loans, since there wasn’t a real profit, was a given – “investing in the company.”

    And now – the US has become Wil E Coyote, having run off the cliff, still waiting for the realization there is such a thing as gravity.

  • avatar
    Ronman

    How come GM let the same people at the helm after two consecutive “monstrous” quarters. aren’t CEO’s supposed to perish when shit like that happens? all that and he’s still there… i don’t understand CEO’s had been fired, and boards reshufled for much much less…..

  • avatar
    Pat Holliday

    I was thinking about this £21billion loss last night, and it made my head hurt. £21,000,000,000? It’d be funny if it wasn’t so serious.

    There’s a furore in the UK this week, as one of our oldest banks (300 years) has had to be bailed out – it made a similar loss to GM’s last year.

    It’s since emerged that the failed 50-year old CEO left with a £650,000p.a. pension… Read about it here

    And then it struck me that Rick Wagoner is still claiming $20million in an annual salary!?

    You guys need to build yourselves a Place De La Concorde in DC or somewhere, and organise a 1789-themed get together.

    The men of power are taking the piss now.

  • avatar
    Stein X Leikanger

    I’ll restate a question here, as I believe it reveals how badly GM has been mismanaged:

    What, in your opinion, would it be worth sending industrial spies to GM for? Anything? I can’t think of anything …

    @ Pat Holliday

    Hmmm, Sir Fred seems absolutely without any shame whatsoever.

  • avatar

    The reason many executives aren’t paying for the errors of their ways is that it’s the boards that hire/fire them – it has unfortunately turned into a “you scratch my back, I’ll scratch yours” kind of situation between the two. The checks and balances oversight is no longer there.

    And it used to be that owning stock in a company provided ownership (no matter how small) in that company, while that’s still technically true, these days I believe most people just see stocks as a way of making money rather than being responsible for the company they have invested in. This makes it easier for executives and board members to do their thing the way they want. Many people don’t even know what stocks they have invested in since it is done through second and third parties (through 401(k)s, pensions, mutual funds, etc.) and is handled entirely by “professionals.”

    @King Bojack, @galaxygreymx5 – Thanks. Flies and muddy faces.

  • avatar
    mikey

    @Marcus Topia Its comforting to know that there is folks that can find humour in others misery.
    Is there anything funnier than a family losing thier home?How about a kid that can’t finish his education?Shattered retirement plans?Stop it dude your slaying me.

    Hey for a real side splitter…how about starving kids ….with flies buzzing around them.
    It don’t get any funnier.

    Marcus:Quit your job and take that act on the road.The comedy clubs in Flint or Lansing or Oshawa they need a few laughs.

  • avatar

    @mikey – What I find humor in (a “throw up my hands I can’t believe it, so laugh or go insane” kind of humor) is the fact that GM has been losing millions a day for years and yet my government (which means, in fact, I) am going to be giving them billions of dollars to get back to a business model that hasn’t worked for a long time.

    Using the absurd comparison to the Chrisitian Chidren’s Fund commercials to highlight this absurdity is as absurd as the absurd situation.

    Absurd.

  • avatar
    JMII

    How much is that Iraq mess costing us per day?

  • avatar
    JJ

    Is the looking at used 360s online somehow related with the IS-F Fiasco by any chance?

    In Germany the cheapest acceptable ones out there are about EUR 60K just like they were a few months ago when the credit crunch was alledgedly not going to seriously affect Europe according to most politicians (seriously, I know you can’t say anything else, but really?).
    Anyway, there are about 250+ on sale in Germany listed on mobile.de. I’m not looking to buy one, but I just check it out sometimes. I would seriously rather have a 360 than an F430.

    On another note, I too am totally not seeing the point of the Toyota iQ. I just don’t see it working, the base model iQ is EUR 12,990 in the Netherlands, the bigger Aygo with the exact same engine is EUR 8,690. There’s really not one reason that they are selling this car in Europe, so probably, they won’t do much of it.

  • avatar
    King Bojack

    @JM II

    Two wrongs don’t make a right.


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