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Don’t ask Chairman/CEO Ed Whitacre. His only comments so far on GM’s Q1 2010 performance comes from a memo leaked to Reuters, in which he says:
In January, I said we could earn a profit in 2010, if everything falls into place. Our first quarter financial results will show us an important milestone, and I’m pleased to say that I anticipate solid operating results when we report our first quarter financials in May
“Important milestones”? “Solid operating results?” What the hell is Whitacre trying to say?
Given that GM’s 18.7 percent Q1 market share is down nearly a full point from its 2009 number (19.6 percent) despite industry-leading spiffs, we’d guess he’s soft-pedaling another weak quarter. Whitacre has said that profitability is within reach of the bailed-out automaker this year, but if The General can’t eke out a quarterly profit soon, there will be precious little time to gin up a successful IPO this year. And with the 2012 election forming a likely political deadline for government withdrawal, each quarter spent in the red puts that much more pressure on GM.
Given that GM’s 18.7 percent Q1 market share is down nearly a full point from its 2009 number (19.6 percent) despite industry-leading spiffs, we’d guess he’s soft-pedaling another weak quarter. Whitacre has said that profitability is within reach of the bailed-out automaker this year, but if The General can’t eke out a quarterly profit soon, there will be precious little time to gin up a successful IPO this year. And with the 2012 election forming a likely political deadline for government withdrawal, each quarter spent in the red puts that much more pressure on GM.
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“What the hell is Whitacre trying to say?”
Whitacre said exactly what he wanted to say: NOTHING!
Too big to fail, but still big enough to burn OUR money in a huge bonfire. =
+1 million, for what it’s worth (about as much as talk of a Gov’t Motors IPO.)
Instead of the tired old ‘profitability’ number, maybe the government will deem that GM should be measured by how well it’s stake holders, the suppliers, unions and health care alliances fared in the preceding quarter.
I don’t know how you could say that he is expecting anything but a profit in the first quarter. What else could be an important milestone?
Losing less than in Q4, losing the same amount, and losing more than in Q4 but less than Q1 of 2009 would be possibilities.
Losing less is not an important milestone. Profitability is. If the milestone is anything less than profitability, Whitacre needs to be gone.
“. . .and I’m pleased to say that I anticipate solid operating results when we report our first quarter financials in May.
Translation: “We have some guys who are pretty good with numbers, and I reckon that after we give ’em about 45 days to work the figures, they’ll have a profit on the books for us for the First Quarter.”
Alternate translation: “We are still working with the legacy of Rick Waggoner’s finance unit, and we haven’t a friggin clue whether we made money in the first quarter or not, but we have some new guys pulling things together and we’ll know in about a month.”
The cynic in me thinks that in the final distillation, these are basically the two realistic options.
“Did GM Lose Money Again In Q1?”
Does a bear shit in the woods?
My guess @ Q1 results:
-car business profitable everywhere except Europe
-GM spent a lot of money on R&D / retooling
-transfered a lot of their cash reserves to loan repayments / retirement fund topup
-Jan. 1 VEBA payment significantly improving cash flow
-spent a lot of money on Opel restructuring (even more will have to spent in next couple of quarters
In other words, GM is about a year behind Ford WRT to profitability but without some of Ford’s liabilities
how soon we forget:
http://www.marketwatch.com/story/toyota-on-track-for-first-ever-loss-in-fiscal-2009
What does that have to do with the price of eggs? GM has lost almost $100 Billion in the last five years of almost consecutive losses.
“GM has lost almost $100 Billion in the last five years of almost consecutive losses.”
0_0 ;
I believe Whitacre is using doublespeak for SNAFU.
Why is GM reporting 1Q result in May? Didn’t the quarter ends on March 31st?
Just finished with the fresh start accounting and the last 2 quarters. For a huge company with a large amount of assets, that would take awhile. That is the reason for the delay in this quarters numbers.
Is it me, or does the picture of Whitaker in the background look eerily like the classic “1984” Apple Macintosh ad?
Operating means results before all the special and one-time charges are figured-in.
In the past, Ford posted an operating profit, but after all the cash-draining charges were piled-on, they suffered a loss for that quarter. They did, however, take pains to emphasize the operating profit, using this as proof that their restructuring efforts were begining to gain traction.
Another time, Ford showed an operating loss, but due to winning a tax-challenge issue with the IRS, and the money they got back (or didn’t have to pay-out, but could release from an account reserved for paying in the event they lost) became a one-time credit to the quarterly result, and so despite burning cash on the operating side, they posted a profit for that quarter.
My guess is that the charges will drag an either black, or slightly-less red than a year ago, quarter down. If this is the case, expect that GM will emphasize that on an operating basis, the company is improving … and that this rate of improvement will continue, or increase … this will be the message GM will try to sell to the markets.
What do they need to earn a profit for? They already made 60 billion in 2009, that’s plenty of cash to pay for a few more golden parachuttes.
Whitacre is a master at both avoiding the press and saying nothing of substance when infrequently corralled. Not exactly the kind of CEO that gives me the warm and fuzzies about an IPO.