By on April 7, 2010

GM has announced its “fresh-start” post-bankruptcy accounting results, and between July and December of last year, the bailed-out automaker lost $4.3b [press release here, full numbers here, in PDF format]. The loss comes despite $57.5b in global revenue, and $1b in “net cash provided by operating activities.” According to GM’s release:

The $4.3 billion net loss includes the pre-tax impact of a $2.6 billion settlement loss related to the UAW retiree medical plan and a $1.3 billion foreign currency re-measurement loss.

Of course, you have to dig into the numbers to find the bad news, like the $56.4b in “cost of sales,” or the $700m interest cost, or the 48 percent North American capacity utilization in 2009, or the 16.3 percent US car market share. Which is why we’ve included the consolidated statement of operations, consolidated balance sheets and more, for your no-download-necessary perusal, after the jump.

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49 Comments on “GM Lost $4.3b In The Second Half Of 2009...”

  • avatar

    I’m surprised GM did that well considering how many ex-GM owners now drive Hyundai, Honda and Toyota cars. My dad owned GM cars from 1957 to 2009 and could be called the most loyal GM man but now drives a 2010 Honda Accord. Why? Too many breakdowns, poor service and indifferent dealerships. It all eventually adds up.

  • avatar

    Let’s give ’em a bailout!

    All the improved sales don’t mean anything if they continue to bleed cash.

    Where’s the promised transparency?

  • avatar

    What a coincidence. I’m currently listening to the This American Life NUMMI show when I load up Google news and see the headline. So of course I head to TTAC for all the latest news. Good for GM. I’m glad the billions in taxpaxer assistance is being pissed away.

  • avatar
    Cammy Corrigan

    Let’s speak to Bob Lutz, I’m sure Toyota is at the bottom of this, somehow.

    Joking aside, if I were an American taxpayer, I’d be fuming. Bad enough you had to put up with the bank bailout, now this?

    Though, something doesn’t make sense here. Ford have been selling cars pretty well, almost to the same levels as GM with similar incentives, yet, I’m willing to bet that Ford will have a profitable quarter. How can that be?

    GM went through bankruptcy, cut most of their deadwood out, shut factories down and got a stack of cash to restructure. How are Ford doing much better than them?

    Even more interesting will be Toyota’s figures, unless they try to hide that too….

    • 0 avatar

      Ummmmmmmmmm… if GM had a REAL bankruptcy where a few weeks after it was declared auctioneers showed up to dispose of the sale-able assets, a true Ch 7, then there might be a fighting chance of recovery for the industry. Yes that would have thrown thousands into unemployment and destroyed years of accumulated benefits but at least their would be the opportunity for new companies to be formed and wealth to be created. Right now these companies are nothing but engines of wealth destruction, not wealth creation. And we still have the over production/capacity problem.

      (Now having written that I realize how devastating a real bankruptcy would have been but there had to be a middle course between what the government did and what I just proposed. I honestly can’t see how the bankruptcy solved ANYTHING.)

    • 0 avatar

      GM was just too big to ignore. If it went into “real” bankruptcy, the whole auto manufacturing industry (at least in the US) would have failed. Ford wouldn’t even have the chance to be profitable with the supply chain messed up.

      “but at least their would be the opportunity for new companies to be formed and wealth to be created”

      and how long would that take? a looooooooooong time
      no guarantee that these companies will be actually better either.

    • 0 avatar


      Key differences: Because the BK was federally managed GM wasn’t really able to fully use the laws to it’s fullest to shed assets quickly. Including dealers, many of whom are being reinstated. And discontinued car lines they have screwed around with for a year, burning cash chasing phantom buyers.

      The ill will of buyers may also be worth a percentage or two against GM and for Ford.

      It was more political theater than a true bankruptcy.

    • 0 avatar

      Let’s not compare the bank bailouts with GM and Chrysler.

      Most of the bailout money given to the banks has been repaid already.

    • 0 avatar

      Have the banks repaid the fed for buying all of those worthless MBSs? Have they paid back what they received via AIG?
      No x 2.

    • 0 avatar

      In 2009, Ford lost $1.4 b in its auto operation. It’s profit for the year is because of the $1.9 b it earned from Ford Credit, plus $2.6 b in special items.

      If this trend continues, I doubt their 1st quarter numbers will be anywhere near what people expect them to me.

      See press release here:

      (And notice, that’s right from FORD, not some outside agency)

    • 0 avatar

      Ford isn’t doing better than GM. That last quarter was all one-time write-offs.

    • 0 avatar

      They had revenue of $57 billion on cars it cost them $56 billion to build.

      COGS is kind of an immovable force. The only way to lower it is to build less or worse cars, neither of which solves their problem.

      (They have certain fixed costs like factories, so that immovable force can nudge a bit if their sales figures go up and they can amortize that over more units.)

      GM could in theory be profitable if it had no other expenses, but they do and so they can’t.

  • avatar

    Their balance sheet looks better and their products are at least worth looking at now. Did you really expect them to do better in 2009? Besides, the bailout saved US industry/jobs/city.

    Now, saving Chrysler was just baaaaad

  • avatar

    If the cash burn continues at this rate GM will end 2010 with the same $14B in cash that it had at the end of 2008 when it was asking Congress for help. Both GM and Chrysler are structured to operate at the higher production levels expected in 2012. I wonder, though, if the knife shouldn’t come out now for cash sinks like the relatively low-volume, low-profit Cadillac Sigma and its underutilized Lansing plant along with all the other low-volume, low-profit vehicle programs like Colorado/Canyon and Shreveport?

    • 0 avatar
      Jack Denver

      That depends on whether you view GM as a profit maximizing business, as a bureaucratic jungle where managers pursue their own petty interests in an environment constrained by a powerful union or as a government jobs program/ organization that exists to fund the pension and benefit payments of its employees. GM hasn’t operated as a rationally managed business for the last 30 years at least, so why should they start now?

    • 0 avatar

      You need to read it again. GM gained 1 Billion in cash over this time. There wasn’t a cash burn.

    • 0 avatar

      “…and $1b in ‘net cash provided by operating activities.\'”

      Though they STILL had an overall LOSS of revenue. You can’t say they made money when in the end, the numbers are still in the red. Bottom line is bottom line, and they had no money at the end of 2009.

      Unless of course you’re the US Government, then you can just bring up the money shortfall by printing more of it and calling it even…(sarcasm here folx)

    • 0 avatar

      No where did I say GM made money. I was only pointing out that this wasn’t a cash burn event when they actually gained cash over the last 2 quarters. There is a difference in cash gain/loss and overall profit/loss.

  • avatar
    Geo. Levecque

    Cammy, not sure about Klaus father and the switch from GM Vehicles but I do know my friend in Scotland drove Vauxhall vehicles for years until 2004 she purchased a Toyota product and told me the difference was like night and day with regard to not driving a GM Vehicle, she still drives her Toyota to this day, she is a Minister of the Cloth and needs a reliable vehicle in her Church duties and she has had no sticking pedals with her Car. I was with her on my recent trip to the UK for my Mother in law’s cremation.

  • avatar
    Billy Bobb 2

    This, ladies and gentlemen, is what Hope and Change looks like on paper.

    Fritzie & The Rick are gone? How could you tell that from these losses?

    Here’s your government, improving our car company we bought for the union.

  • avatar

    China had hundreds of state owned and operated auto makers. Of course, most of them are gone for good by now. So will GM.

  • avatar

    Time to increase fleet sales guys!

  • avatar

    Time to up the incentives!

  • avatar

    Oh crap, they already did that, crap, they were higher than everyone else too.

  • avatar

    How about a bake sale at the Rencen?

  • avatar

    Well, they’re losing money at nearly the same rate as pre-bankruptcy.

    The article picture is fitting.

    They can’t incentivize their way to profitability.

    Maybe my prediction of GM’s final descent in 2013/4 will come true after all.

  • avatar

    Probably a simplistic way of looking at the document and comparing Dec. 31, 2008 to Dec. 31, 2009, I see:
    $50b increase in Assets – I wonder where that came from…
    $70b decrease in Liabilities – I guess bankruptcy helped some

    Jan. 1 to March 31, 2010 will be the more important numbers to see in order to get a sense of some sort of trending from the “new” GM (although I expect Opel to skew the numbers at some point).

    I have to wonder if Ford will be able to recover from their liabilities the hard way (ie. from profits).

  • avatar

    We’ll have an accurate picture of how well Gov’t Motors can weather the storm once the Cruze hits the market. If GM can manage a profitable and popular small car, that bodes well for them long-term. (Sadly — for GM — seems even the fanboiz on “inside news” sites largely expect that one to be a dud, too.)

    Plain, ugly truth: Gov’t Motors cannot sell enough Terrains, Equinoxes, and Lambda-derivatives to offset incentive queens like the Malibu. Fads like the Buick LaCrosse and upcoming Regal can only do so much, and that can last only so long before the novelty is gone from that brand, too. (It would be interesting to see if Buick can survive solely thanks to sales in China.) What little profits to be had are swallowed by GM’s massive union-supported bureaucracy and still-astronomical labor costs.

    So, barring some kind of miracle — something to the tune of a Cobalt clone GM is able to sell 300,000 of per year at $40K a pop, with stellar quality and reliability ratings to boot — I really can’t see how the company continues without still another bailout, possibly later this year. That’s not going to happen; I suspect the very suggestion would be met with enormous public outcry, and a massive voter swing in the upcoming elections.

    The future doesn’t appear too bright for Government Motors.

  • avatar

    Call me crazy, but I don’t think these numbers are that bad. This reflects 2 quarters of very bad sales in the US market. This is during carmageddon. The VEBA expense is not longer recurring.

    1.7B loss during this time period really isn’t bad. By comparison, I believe Toyota loss about 1.7B in the 2nd quarter, but gained it back in the 3rd quarter to roughly break even during this time. GM still has a long way to go. But these numbers will improve as the market does.

    • 0 avatar

      With all due respect Steven02, both of your comments are based on facts. No sir,your not crazy,but you have been around TTAC long enough,to know that facts always get in the way,of a good GM bash.

    • 0 avatar

      You mean the GM Bash being held at the Rencen?

    • 0 avatar

      $58 billion in revenue after spending $57 billion to build the cars. (That’s COGS.)

      Doubling the number of cars gets $116 billion in revenue to $114 billion in COGS, for a gross profit of $2 billion, which isn’t enough to make up for other costs.

      Now, some of their costs are fixed. I’m gonna hand wave and say 10% of the cost just to build the car is in the factory, the other 90% in the parts and labor. (Remember, I haven’t brought in the rest of the business yet.)

      So if $5 billion of that $57 billion was fixed, doubling sales would brings COGS to $109 billion, for gross profit of $7 billion, which is barely enough to run the rest of the company, much less invest in R&D or pay back the government loans.

      You might say that my 10% figure is too small, but hoping for GM to double its sales figures is also crazy as well.

      If someone can (more) accurately say what portion of manufacturing costs are fixed, please do so.

  • avatar

    I have been accused of GM bashing, Chrysler bashing and union bashing by friends and co-workers of late. These same friends and co-workers often invite me to go car shopping and are definitely not going into the big 3 showrooms. In the last 3 months I know friends and family who have purchased the following: Mazda 3, Honda Accord, 2 Honda Civics, Hyundai Santa Fe and Tucson, Toyota Yaris,Toyota Corolla, Chev Malibu. Guess which one was in for a transmission defect??
    Consumerism is about freedom of choice and the best product for the money.

  • avatar
    buzz phillips

    CRUZE? GM has yet to build a decent small car! Vega, Chevette, Sunbird/fire, cavalier, cobalt, etc?

  • avatar

    On the balance sheet, GM lists $30 billion in “goodwill” as an asset?

    I wonder how they computed that?

    • 0 avatar

      Ahh the joys of accounting. How to mitigate the harsh realities of your balance sheet with entries that most people don’t pay any attention to.

      It comes from fatasyland. The same place most asset valuations come from (that’s hardly unique to GM).

      Looks like 2012 for the next round of whatever is politically expedient.

  • avatar

    Hyundai seems like it is filling in market segments where GM is fading.

  • avatar

    While I continue, during casual conversations, and the opportunity allows it, inform others of my 2004 decision to assist the “home team” by buying a Ft. Wayne-made Chevy truck and how several dealers AND corporate GMC spat upon me by refusing to even make a honest attempt at diagnosing several of the defects that negatively affected the truck and that added several thousand dollars of indirect cost to the total “cost of ownership” during the warranty period (lost time/wages, car rentals, etc)

  • avatar

    they still have to invest in the business – so a run rate of $2b per year cash from operating and forecast cap ex of $6b (cap ex was $7.5b in ’07 & ’08) results negative free cash flow.

    But yeah, “favorable managed working capital of $4.3 billion primarily driven by the effect of increased sales and production on accounts payable and the timing of certain supplier payments” = no cash burn from operations…

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