By on February 16, 2012

Analysts had already expected a disappointing 4th quarter, but when GM announced the results of the October – December quarter today, the results were worse than feared. Net income attributable to common shareholders was $500 million, or 28 cents a share. Analysts had expected two cents more.

Strong results in North America were dragged down by losses in Europe. Said GM CFO Dan Amman:

“We clearly have work to do in Europe. We have work to do in the South America business. Frankly, we have work to do all around the company in terms of cost opportunity.”

That work should not be easy. The business climate in Europe is getting rougher. Opel is losing market share in Europe, and the unions oppose any further plant closings. In China, the growth of the new car market has come to a halt.

 

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123 Comments on “GM Disappoints In The 4th Quarter...”


  • avatar
    TheHammer

    4th quarter was flat but the General still managed to haul in $7.6 billion for 2011. Also reclaimed title as world’s #1 automaker. Not too shabby.

    • 0 avatar
      alluster

      Is it 7.6 B or 9.1 Billion? Conflicting reports out there. Bloomberg says 9.19 B? Either way its the highest profit in GM’s 103 year history.

      http://www.bloomberg.com/news/2012-02-16/gm-earns-record-9-19-billion-net-income-while-opel-loses-money.html

      General Motors Co. (GM), which regained the global auto sales lead last year, earned $9.19 billion last year, the largest profit in its 103-year-history, while its European business again lost money.

      Fourth-quarter net income attributable to stockholders slid 48 percent to $725 million, the lowest in two years. GM had earned more than $2 billion in each of the three previous quarters. Profit in the fourth quarter fell 25 percent to 39 cents a share, trailing the 41-cent average estimate of 17 analysts surveyed by Bloomberg.

      GM North America earnings before interest and taxes more than tripled for the year to $7.19 billion on improved U.S. sales. The automaker’s Europe business, including the Opel brand, lost $747 million for the year. While that’s better than Europe’s $1.76 billion loss in 2010, it’s not break-even as GM had planned until November.

      • 0 avatar
        56BelAire

        I didn’t realize GM(government motors)had a 103 year history. My mistake:-(…….(sarc)

        Since GM made 7.6B last year were the old GM bond holders made whole?? Again (sarc).

      • 0 avatar
        Brobdingnagian

        I love the way people quote “largest in history” profits in dollars UNadjusted for inflation. This was not a big earnings year for a company with GM’s history and size. Not even close.

        Disappointment is GM’s middle name.

    • 0 avatar
      KixStart

      Didn’t the former “World’s #1 Automaker” go bankrupt?

    • 0 avatar
      Secret Hi5

      Why did GM stock price jump up 4 % today?

    • 0 avatar
      Secret Hi5

      edit: Now headed toward 6% rise (GM stock price)

      • 0 avatar
        APaGttH

        Largest profit for new GM and old GM. Largest profit since 1997 and biggest by a landslide.

        Generally speaking, shareholders like it when companies make money.

        TTAC and FoxNews are the only two sites I’ve seen spinning 4Q and 2011 as “bad.”

    • 0 avatar
      rpol35

      This is the only website that I have reviewed today that considers it a “disappointment”.

      As a previous poster indicates $7.6 BB in net income isn’t too shabby and the stock is up 5.98% as I write this. We should all hope that the stock continues its rise so the U.S. Treasury can sell its shares and hopefully recover more of “our” investment in this questionable operation.

    • 0 avatar
      jkross22

      GM – the offiicial car maker of the US Government.

    • 0 avatar
      Sam P

      The tone is no surprise, given that the author worked in PR/marketing at a direct competitor of GM.

      Wonder what the spin will be like on VW’s next batch of quarterly results.

    • 0 avatar
      icemilkcoffee

      Yeah- this whole ‘analyst expectation’ thing is just bullsheeet. If a company is making profits it’s making profits. Who gives a rat’s a$$ what the analysts were predicting. Just because the analysts had a broken crystal ball doesn’t mean GM is doing poorly.

  • avatar
    tikki50

    I wouldn’t call it disappointment at all. Disappointment was 10 years of quater after quater losses, thats a disappointment. So they had some one time charges in the 4th, call it a penalty. Now Opel thats a a problem GM has to deal with quickly. I think the Unions in Germany better find a way to fix the bleeding of cash before GM just decides to say bye bye. They could keep the design department of opel but ditch assembly altogether.

  • avatar
    gslippy

    I think Q1-2012 sales of the Volt will be more important for the company’s image. They’re shooting for ~45k this year (the moon), so Q1 should see about 10k Volts move out. Or not. I don’t see this happening even with the proposed $10k subsidy.

    • 0 avatar
      KixStart

      Given that January sales were 603 and Q1 is now 1/3 gone… Yeah, not happening. Soooo not happening. In fact, I think Feb sales will remain in the vicinity of 600 and they may even decline.

      • 0 avatar
        alluster

        Kix, i am not sure why you think selling less volts than toyota sells prii is a bad thing? Neither makes any money for their manufacturer. The more they sell, the more money they lose. Both cars are props by their receptive companies to portray a green image that can help them sell other more profitable cars. GM’s image had been tarnished as a builder of SUV’s and Trucks that they are trying to undo. Whether they will succeed or not is debatable. But don’t for one second think that either company wants high gas prices and high hybrid sales.

        Before you argue about Prii profitability, its no secret Toyota needs the yen at 85 or more to the dollar to profitably export to the US. With the Prii still exported from Japan and the yen consistently staying in the 76-79 range for well over a year now, there is really no chance Toyota makes any money on the Prius. The 3.9 Billion loss Toyota took in Japan for only 9 months reflects the fact, despite some of the losses masked by lexus exports which are at least breaking even if not profitable, barely. The Prius C is only going to make losses wider due to the fact that it is priced $5K lower while costing just as much to make.

        Is GM perfect -no. Do they still have a lot of work ahead of them- yes. Are incentives high -yes, but are lower than 2010. Are fleet sales still high – yes, but still lower than 2010. Is Europe profitable -No, but they cut losses by more than half or $1B ($747M vs $1.76B loss in 2010). Are they as profitable as Ford – no, but they needn’t be. It’s great that Ford is raking in cash but GM doesn’t have to match them. Is this cause for celebration for GM fanboys, maybe not, but after years of negative news and anemic losses, 3 straight profitable years is heartening to say the least. To you, they may not be the best at everything or anything, but that doesn’t mean people shouldn’t love them. Heck, every sports team has its fans however good or poorly they perform. If people can cheer/support only the best teams, the Giants and Patriots would be the only ones with any fans.

    • 0 avatar
      tikki50

      GM should match the government subsidy offered, yep match it. IF they honestly want to move the volt, it NEEDS to be cheaper. When you look at the Prius and that family’s upcoming models, the price point is dropping quickly which will put the volt out in never never land. The volt’s largest problem is its new technology thats still unproven to be truely reilable, where as the prius is just proven. Where’s the malibu volt, Buick laCrosse Volt, GM built a technological master piece, but its a one off, a model if you will. Its the technology of the volt that needs to be sold, not the volt itself. Dump the car, just cancel it and call your drive train the VOLT.

      • 0 avatar
        KixStart

        GM IS offering various deals to help move the lithium. Yes, they could promote a match for the federal grant but that’s $7500 and I’m sure they don’t want to absorb that. It’s not likely they’re making any money as it is.

        And, is it really a technological masterpiece? It’s highly compromised with seats for just 4 and only a small cargo area. It does have fairly whizzy gadgets on the dash but any car could have that. The range is OK but the Mitsubishi iMiev gets more range out of its 16kwh. The CD is mediocre for a car of this class, purpose and cost (in spite of an air dam that apparently scrapes the ground pretty often… there’s a short dam option available now). GM didn’t bother to put an Atkinson engine into it, choosing instead to use higher compression and require premium fuel to boost efficiency a tad. The car is very heavy. The end result is so-so range for its 16kwh and mediocre DBFE.

        Survey the market. Several non-hybrids are advertising 40mpg highway and getting it. The Prius C achieve 53 city, the regular Prius gets 50 city and often does better than its EPA numbers. Volts are lucky to get into the high 30’s and lower scores are not unusual.

        And the judgement of the market does not seem to be that it is a technological masterpiece. At Jan sales of 603, it’s pretty clear that people don’t think much of it at all.

      • 0 avatar
        doctor olds

        You gentlemen may want to note that extended range Volt is about the same price as Ford’s electric only offering. Looks like a value from that perspective.

    • 0 avatar
      APaGttH

      Every customer that walks into a GM showroom, looks at a Volt, and drives off in a Cruze Eco is a win for GM.

      Volt – sold at a loss.

      Cruze – sold for profit.

      I would rather GM sell 10 Cruze Ecos than 5 Volts any day of the week.

      Right now the way the math works, I’d rather GM sold ONE Cruze Eco than 10,000 Volts. There’s no making it up in volume. ;-)

      • 0 avatar
        KixStart

        What makes you think that happens often enough to justify the development of the Volt?

        Stop drinking the “halo” Kool-Aid.

        Volt “intenders” aren’t going to buy something that drinks gas. Anybody who’s heard the price either isn’t put off and will buy it or will ignore it. And the Chevy dealer is a ghost town. Rep. Kelly, as I recall, complained that no one would even come in and look at it. I have read a number of accounts of people who expressed interest in the Volt getting to keep it over night or even over a weekend for a test drive. This car is doing nothing for GM until it actually starts to sell (if ever).

      • 0 avatar
        Pch101

        “Stop drinking the “halo” Kool-Aid. Volt “intenders” aren’t going to buy something that drinks gas.”

        You’re missing the point of what a halo is supposed to do. A halo is supposed to create brand value for other products. The halo itself is not itself intended to sell in high numbers.

        GM needs to build credibility with car buyers. It has to prove to the market that it can build good smaller cars. If the Volt does that with those who are shopping for compacts, then it’s a benefit, even if those buyers had absolutely no attention to buy a Volt.

        In any case, take the long view. The R&D that went into the Volt should help GM with producing other vehicles, both now and later. As does racing, technological research should improve the breed, and as does racing, a win on the circuit might help sales of the more mundane vehicles.

        I continue to doubt that the Volt will itself prove to be a profitable vehicle. However, that doesn’t necessarily mean that it should not have been developed at all. The high-volume cars need to be profitable, but the low-volume brand builders don’t all need to be.

      • 0 avatar
        KixStart

        How is a car that doesn’t sell going to build brand equity?

        The Volt is not the kind of car that makes for a halo, it doesn’t have the necessary panache, pizzazz, style or excellence in any dimension. The technology under the hood really isn’t even as good at the 14 year old Prius.

      • 0 avatar
        Pch101

        “How is a car that doesn’t sell going to build brand equity?”

        I think that I just explained it.

        “The Volt is not the kind of car that makes for a halo.”

        The Prius has been a halo car for Toyota — it establishes the green and small car credentials of the overall brand.

        The first New Beetle was a halo for Volkswagen — it got people into showrooms who, for the most part, bought Jettas.

        The revived Z was a halo that helped to keep Nissan from sliding into complete irrelevance, even though few people actually bought them.

        I don’t know whether or not the Volt will prove to be a halo. But given GM’s poor history with small cars, I would say that it couldn’t hurt for GM to look like a sophisticated seller of compacts and midsizes, instead of primarily being a producer of pickup trucks.

        A brand is effectively a reputation, which leads to a promise. Bad reputations have to be fixed, with patience and persistence. Hyundai’s turnaround and Ford’s resurgence weren’t immediate processes, and if GM is to make a real comeback, it won’t be doing it in just a matter of weeks.

        If you can respect the fact that Toyota succeeded by taking the long view, then apply the same reasoning to GM, and for that matter, any other damaged business that is trying to build itself back. It’s ironic for the same people who complain about GM’s short-term thinking to bitch even more when things don’t magically fix themselves within a quarter or two.

      • 0 avatar
        KixStart

        I see your point but I think you way overestimate the value of the halo. And considering this is really just a compact car witha Prius-like drivetrain and extra D cells, it’s hard to see how this has any halo appeal at all.

        The Corvette has a bit of it but do people really go to Chevy dealers to drool on Corvettes and then hop into a Malibu and think that some of that mojo rubs off on it? The Malibu is a Camry… just not as good.

        Part of the beauty of the Prius is that it actually sells. The original didn’t do much for Toyota but the radical Gen 2, which actually sold, may have perked up Toyota in general. The Volt needed to do that and it isn’t and looks like it won’t.

        I have no objection to GM improving its fortunes with better or strategically useful product but this isn’t it.

        The long pole in the tent is the battery and GM doesn’t own that. When batteries improve, everybody else buys the better batteries and improves at the same rate as GM.

      • 0 avatar
        Pch101

        “And considering this is really just a compact car witha Prius-like drivetrain and extra D cells, it’s hard to see how this has any halo appeal at all.”

        I already explained that: “GM needs to build credibility with car buyers. It has to prove to the market that it can build good smaller cars. If the Volt does that with those who are shopping for compacts, then it’s a benefit, even if those buyers had absolutely no attention to buy a Volt.”

        “Part of the beauty of the Prius is that it actually sells.”

        It took years to build a market for the Prius. If Toyota took the approach that you are advocating for GM, then TMC would have dumped the Prius ages ago and there wouldn’t have been enough time to create a success story to talk about. Are you seeing the irony here?

      • 0 avatar
        doctor olds

        To support Pch101- Chevrolet will sell 10,000 2011 Volts.
        Toyota sold 8,500 Prius in its first year.
        GM knew Volt would have a first year volume of 10K.
        They planned it carefully.
        GM is in this for the long run with Volt setting the stage for electrication of vehicles. The architecture is flexible, enabling diverse hybrid options as well as alternate energy storage options- fuel cells for example.
        Politics aside, it is the most innovative vehicle available for sale anywhere in the world.

  • avatar
    mtr2car1

    This is a disappointment.

    The number look impressive because GM is a big company, but when you generate greater revenue yet earn less profit than Ford – even after having the books scrubbed by bankruptcy, you need to be disappointed and should be talking about how you have a lot of work to do.

    China is a big market for them but when you look at revenue, it’s not contributing like it should when compared to North America.

  • avatar
    forditude

    Hmmmm. Record profits, stock up 4% but you’d never know this from the TTAC lede. But you guys aren’t biased against domestics, right?

    • 0 avatar
      tikki50

      they be fools to deny it.

    • 0 avatar
      Pch101

      You really need to learn something about stocks.

      Every quarter, securities analysts make forecasts of earnings per share of major companies. When earnings don’t at least equal the forecasts, market commentators commonly refer to that as “an earnings disappointment.”

      On average, the analysts were forecasting 4th quarter earnings of 41 cents per share. GM is reporting earnings of 39 cents, which is below 41 cents. The failure to hit the 41 cent mark is the disappointment.

      Disappointment does not necessarily mean that stock prices immediately fall, or vice versa. Share prices are bets on the future. Often times, good news produces a sell off and price declines because investors figure that the good times have peaked and the stock has nowhere else to go. It isn’t what you think.

      • 0 avatar
        forditude

        I’m an options trader who relies on technicals, so I think I have a grasp of how stocks work. I love the quote “Often times, good news produces a sell off and price declines because investors figure that the good times have peaked and the stock has nowhere else to go.” Really? People just feel that everything has peaked and that’s why stocks sell off in your opinion? Not due to overbought/oversold or other technical factors? Can you tell me when people are going to think AAPL has peaked so I can take profits?

        BTW, GM is up 5% as of this posting.

      • 0 avatar
        Pch101

        “I’m an options trader who relies on technicals, so I think I have a grasp of how stocks work.”

        In that case, you should drop the wounded domestic fanboy shtick, and not bother whining about someone who described an earnings disappointment as a disappointment. You’re supposed to know better.

        “Really? People just feel that everything has peaked and that’s why stocks sell off in your opinion?”

        You’re supposedly an options trader, yet you’ve never heard the expression, “Buy the rumor, sell the news”?

      • 0 avatar
        alluster

        I guess forditude was appalled as i was to see the amount of negative spin by ttac wrt to anything GM, enough to put faux news to shame. Explain to me why there no details wrt to annual profits, operating income, global revenue? Except for cherry picked bits showing negative info there no links to press releases, charts etc which one expects from a news source. Thank god this site is not an exclusive news source most people.

      • 0 avatar
        Pch101

        “Explain to me why there no details wrt to annual profits, operating income, global revenue?”

        Earnings are good.

        41 cents were anticipated.

        39 cents were earned.

        39 < 41. Disappointing.

        If you want details:

        -US market share declined
        -Europe produced losses
        -South America produced losses.

        Yippee!

      • 0 avatar
        forditude

        These earnings are NOT disappointing, as the street shows us. The reason for the decline is Europe, and if you happen to notice, Europe is a basketcase right now. Every earnings call I listen discusses the impact of Europe on the bottom line – it affects EVERY industry right now, which is why the market is discounting it. The TRUTH is that GMNA had a small revenue increase and record profits, meaning that they are getting more margin per vehicle sold in a time of moderate to flat auto sales. Higher revs plus higher profits with a mild loss from Europe (which is affecting every global company on the face of the earth) is not a disappointment.

      • 0 avatar
        Pch101

        “These earnings are NOT disappointing”

        When earnings exceed forecast, they are referred to as a “surprise.”

        When earnings fall short of forecast, they are a “disappointment.”

        GM earnings were two cents below forecast. That’s disappointing.

        That does not mean that the stock is bad, or that the company wasn’t profitable, or that the horsemen of the apocalypse are galloping toward the Ren Cen. What it means is that earnings were less than were projected. It’s not that complicated.

        If today’s spike is driven by the fundamentals, then I would presume that the market believes that the negatives in the news that created the disappointment can be turned around in future quarters, which could mean higher future earnings, which would then likely mean higher future stock prices.

        In other words, the bad part of the news could represent a buying opportunity, not a reason to sell it off. The devil is in the details, and the play is in future earnings. Today’s earnings are effectively historical in nature, whereas investors are buying the future.

    • 0 avatar
      jkross22

      I’m not biased against Ford or Chrysler/Fiat. I am biased against GM (or any company) that historically has had a loose affiliation with actual numbers. Hubris is alive and well at GM.

      An article I read in the LA Times mentioned that GM is planning on paying up to $7k for each hourly employee as part of profit sharing.

      Profit sharing. In the midst of a recession. In the midst of that company still on the hook for owing Uncle Sam $25 billion.

      I wonder if that was written into the UAW contracts during GM’s faux-bk.

      • 0 avatar
        mr_min

        Pch101 & forditude
        Your both right, but I think your coming at it from different viewpoints.
        I’ll help
        The headline should read “Wall street analysists wrong, GM performance not as good as expected. Main street don’t care and stock price goes up”

        All things considered you do need to analyse the numbers not on what someone else thinks it should be, but on whether they are performing as per the share price and the amount of capital in the business.
        Based on the share price, a few people don’t care about Wall streets opinion and think the share is worth owning.

  • avatar
    Zackman

    My goodness, I love General Motors. Go team, go!

    Planning my next Impala as I type…no kidding…

    Can’t wait for the Cincinnati Auto Show this weekend where I can personally inspect all the glorious progress my favorite company after Coca-Cola and Warner Brothers will have on display, and I can key all the foreign garbage (and some Fords)!

    • 0 avatar
      Educator(of teachers)Dan

      Pssssssss… Zackman, you’re an ex Chrysler owner too, don’t forget to check the V6 Charger too… Sure would be better than the LeBarron coupe you used to own.

      • 0 avatar
        Zackman

        Oh yeah – Chrysler too. I am impressed with their progress thus far, but I want to see the reliability stats a couple of years hence…

        Our LeBaron was a convertible, just to set the record straight. I/we were K-car and K-car-derived junkies for probably too many years.

      • 0 avatar
        Educator(of teachers)Dan

        Wait what about the M-F body you inherited from your uncle with the Batman sticker on it?

      • 0 avatar
        Zackman

        The Batmobile? Oh yeah – you’re right – that WAS a coupe – AND a LeBaron! I was thinking of our red car…must’ve been re-combing my hair…

    • 0 avatar
      Toad

      “I love General Motors?” Really? That is like loving Sears, the DMV, or the color beige. I can see liking General Motors, even respecting it, but LOVING it?

      Plus aspiring to an Impala, the fleet/rental/motor pool queen? Again, a respectable, maybe practical choice, but aspirational? The Impala in its current incarnation is blandness incarnate, a good default choice for people who don’t really like or care about cars, or have their car chosen for them by their employer.

      That said, I’m glad you are happy, although if the Impala makes you happy there are other choices that might make you ecstatic.

      • 0 avatar
        Zackman

        Tongue was firmly planted in cheek…

        Yes – for the record, I have been and so far still am very pleased and happy with my Impala. Maybe I just don’t require much to please me, as it is a fairly simple car, i.e. few bells and whistles.

        As far as other cars making me “ecstatic” – I’m sure there are – I haven’t found one yet, but I still have a mental block that longs for the type of cars GM used to make – unrealistic to be sure, but I’m quite proud that the General has built me a car that has been just as reliable as our Honda CR-V. Will it last as long? Who knows? So far, so good, though.

        I hate Toyota…

  • avatar
    wsn

    Well, GM stock may have gone up 6% today.

    But since the new IPO, GM stock underperformed Toyota by 30% (i.e. since Nov 2010, Toyota went up 6.5% and GM went down 22.6%).

    Consider that Toyota was hit by an earthquake and didn’t receive billons in bailout, THAT is disappointing.

  • avatar

    bottom line, GM doesn’t understand how to sell cars. their success was due to negatives involving the competition, not from their abilities to succeed. the downward trend will resume this year and US market share will drop to 15%. Ewanick & Co are incapable of stopping the decline but are perfectly well equipped to offer excuses.

    • 0 avatar
      jhott997

      I am tempted to believe you might be right with your 15% market share prediction. GM will struggle to balance market share/capacity utilization vs. incentive spend in 2012. It will be fun to watch.

    • 0 avatar
      jpcavanaugh

      But it’s all under control now that they have figured out that they need to benchmark BMW’s and Hyundai’s profit margins.

  • avatar
    mtr2car1

    Let’s set the market’s reaction to the side for a moment and compare GM’s numbers to it’s cross town rival.

    GM’s Q4 profit was $472M vs. $586 for Ford, 19% less on higher sales.

    Their EBIT continues to lag competitors like Ford and VW (they even admit to that), they lost share in the most profitable market and have yet to show a turn around plan for Opel.

    For any company (2 years out of bankruptcy or not), as compared to it’s peers – this is a disappointing result.

    • 0 avatar
      doctor olds

      Yes, Ford marginally out earned GM last year, but, for the record:
      In 2011, GM gained share in the U.S.(by far the world’s most profitable market)while Ford lost share.

      GM outsells Ford globally by over 9 million to 5.4 million, rising to #1 in the world whild Ford has fallen to 5th place after Hyundai-Kia.

      GM’s 4th quarter profit improved year over year while Ford’s declined.
      GM North America generated nearly as much profit, $7.2 Billion, as Ford’s Global profits of $7.8 Billion.
      It will not take much contribution from overseas for GM to erase that small gap.

    • 0 avatar
      jhott997

      “Their EBIT continues to lag competitors like Ford and VW”
      Bingo. A little detail that most gloss right over.

  • avatar
    NormSV650

    Nice anti-GM style spin Bertel. Nice they made a large profit.

    I’m still waiting for the Toyota January sales article highlighting the almost 50% incentives.

  • avatar
    doctor olds

    Let’s be clear. The sideline chatters, the analysts, guess how much profit the company will report, and if it comes in lower than their guess, that is a “disappointment”.

    A rational evaluation of GM would conclude that nearly $8B in net profit so soon after bankruptcy with a still very weak U.S. economy, and despite the huge drag on all carmakers of the much worse Euro economy, is a good stroke of business.
    More is better, but $8B is a good start!

  • avatar
    doctor olds

    Oh, I might add- Ford missed its earnings target by a much larger margin,20%, $0.20/share vs. $0.25/share expected, than GM who missed earnings target by 5%, $0.39/share vs. $0.41/share expected.

  • avatar
    APaGttH

    WOW B&B discourse here is pop the popcorn worthy.

    GM sucks!

    No they don’t!

    Yes they do!

    No they don’t!

    Hey, I don’t hate GM, but they still suck.

    No, you’re biased.

    They aren’t biased.

    It’s Bertel’s fault.

    GM sucks!

    NO THEY DON’T!

    I can’t wait to buy a Vega

    GM makes better cars

    I hate the government.

    But George Bush said

    Ya but Obama did it

    Sheeze.

    • 0 avatar
      56BelAire

      If we all agreed, we wouldn’t have a comment forum…….and if we all agreed, it wouldn’t be nearly as much fun. We’re all just sharing our own opinion, it is not wrong to have an opinion.

      • 0 avatar
        APaGttH

        It isn’t the opinion – it is the absurd passion of some and some of the troll bait that is out there.

        Some of the B&B comments are definitely well thought out and provide good arguments pro and con.

        But this is the kind of story that generally brings out the worst posters, and the worst in posters – I’m finding it rather entertaining to see some people chumming the water (on both sides of the arguments) and the irrational response to the blood in the water.

      • 0 avatar
        bunkie

        Yay! I’m a “worst poster”!

        Now, back to our regularly-scheduled broadcast of Hypnotoad (TM).

    • 0 avatar
      Motorhead10

      +1 and the funniest part is that none of the opinionators have a snowball’s chance in Hell, Michigan of getting the other side of opinionoids to budge off the idea that their opinionations are impenetrable – you’re all throwing marshmallows at a brick wall people, just from two different sides.

    • 0 avatar
      wsn

      Well, the big boys had the same debate, only in the stock market.
      Buy GM!
      Sell GM!
      Buy TM!
      Sell TM!

      So far? Those betting on the old GM stock lost all of their stake. Their women left them, and went in bed with those who bet on Apple (and to a lesser degree, Toyota).

      The new GM didn’t go to zero yet. But has underperformed Toyota by more than 20% so far. Things are not looking good.

  • avatar
    200k-min

    Wall Street numbers are nice, but what I know is a quick survey of the office parking lot. I work with all college educated professionals aged rougly mid 20’s to mid 50’s with middle to upper middle income wages. Over the past several years all the new vehicles in the lot have been a mix of Japanese and Euro brands with several Fords mixed in and one Jeep. No GM metal, I repeat absolutley NO GM Metal. Not even an Escalade or Tahoe. You’d think in just market share alone one of these new vehicles would be GM. What does this tell me? It tells me GM is not appealing to a demographic that they desperately need. That spells long term problems, regardless of how great their #’s are this year.

    • 0 avatar
      Lokki

      “No GM metal, I repeat absolutely NO GM Metal. Not even an Escalade or Tahoe. You’d think in just market share alone one of these new vehicles would be GM. What does this tell me? It tells me GM is not appealing to a demographic that they desperately need.”

      IMHO (and I’m sure many of you can tell me why I’m wrong) GM’s problem remains their “moonshot” improvement approach to their vehicles. Every new model is claimed to be a miracle worker. You never here of “incremental improvements in response to customer input”. Ever. This approach has worked for decades now for Toyota and Honda, and Hyundai. BMW agonizes over it every time they change the 3 series. How can they make it “the same but better”?

      GM always discards the old brushing it off while claiming that the new (whatever) will be dramatically better. When it isn’t it generates disappointment. The CTS is prehaps the only car from GM in recent memory where a mediocre first try was actually greatly improved in its second version. However, GM didn’t boast about that. Instead it’s all about the new revolutionary Volt/Cobalt/ whatever.

    • 0 avatar

      BINGO. image is key, perception equates to reality in sales. understanding customer psychology, motivation, and desire is critical to increasing share. GM has plenty of programs to enable shipping product from the factory to the dealer lots (ie SFE, EBE) but zero concept of how to move the metal onto the streets. in fact, they are more of a hinder than a help. Word Press monitoring here will not allow me to vividly describe the ineptitude prevalent in The Tubes.

    • 0 avatar
      Brobdingnagian

      That’s my demographic too, and you’re right about it, but keep in mind we are a minority. GM doesn’t sell to us. GM doesn’t make anything for us. GM has always relied on LCD customers in order to keep being the same old GM. They don’t make cars, they stamp out widgets and sell them by the case, just like lite beer.

      But in order to stay in business, GM will need customers who have money to buy cars, and that is the real, long-term worry. GM may find that its only remaining customers do not reside in America.

      • 0 avatar
        mike978

        Brobdingnagin – what do you mean they don`t make anything for us? You may not like the product (perfectly acceptable opinion) but GM is a full line manufacturer. With luxury, “premium” and mainstream. Truck, small car, midsize, large, crossover and SUV. They seem to be missing a sports car ala the MX5 but most manufacturers are. So they do make something (whether it is good or not) for pretty much every niche.

      • 0 avatar
        wsn

        mike978, “us” want something that’s good even at the 10th year mark. I.e. 2002 Cavalier vs. 2002 Civic.

        GM is such a company that hype their products before launch but that’s about it. Fortunately, there is still a group of people with extremely short attention span that will buy the crap, so that the rest of us don’t have to pay for bailouts more often.

    • 0 avatar
      jpcavanaugh

      My informal survey confirms yours. Off the top of my head, I can think of one person in my office building who bought a new GM car in the past 3 years. A Saturn Vue. And she just replaced it with a Jeep, because she hated, no scratch that, she despised the Saturn.

      I went to a family reunion last summer. 3 generations of drivers and not a single GM car. Everyone had Honda, Toyota or FoMoCo. And this is in the midwest. The only one in the family who owns one (so far as I know) is my mother with her 06 LaCrosse, and GM gave her that one in the Hot Button contest givaway.

      • 0 avatar
        doctor olds

        @jpcavanagh- As a matter of fact, GM did sell far more cars than any other maker and gained substantial market share in America, as well as globally last year while Ford actually lost share.

      • 0 avatar
        highdesertcat

        Olds, it’s meaningless because GM isn’t using those profits to pay back its bail out money and interest, if any, because they have been absolved of all debts by Obama (not by Bush).

      • 0 avatar
        doctor olds

        @highdesertcat- GM generated operating profit of over $9B last year. That is the real truth.

        You are right to point the finger at Obama for the details of the government’s involvement. GM had no other choice except liquidation.
        No, GM will not be paying anymore back from company operations because Obama decided to take the ownership stake in exchange for the investment.
        It is difficult to understand your logic, blaming the company for the acts of government.

  • avatar
    dvp cars

    …….up a whopping 9% at the bell…….it would appear that at least today’s crop of new shareholders found neither the latest sales figures, or the $7,000 tip to the staff, disappointing at all. Of course there were an exactly equal number of (now) former shareholders who, in their minds, got off the ship (appropriately enough, considering the industry involved) “just in time”.

  • avatar
    RRocket

    Not terribly difficult to turn a profit when you get to wipe out nearly $30 billion in debt though BK. Oh…and not having to pay tax on those profits for the next ~20 years helps too. Nearly $45 billion in carry over tax breaks. Something that companies who declare BK don’t normally get to keep. But since this was government owned, I guess you can make up the rules as you go.

    So all that considered…no, I’m not terribly impressed.

  • avatar
    lw

    So they are making billions now! Awesome. They will finally be able to cover their pension liabilities and pay their workers properly. Raises and bonuses should be coming for everyone…

    But then again this article tells a different story…

    http://online.wsj.com/article/SB10001424052970204792404577225202499659404.html

  • avatar
    highdesertcat

    The only thing that matters is when we, the people, start to see that bail out money being paid back. And it won’t be any time soon. GM can’t lose as long as we, the people, own them, and carry their water for them.

    GM doesn’t even have to make a profit because it has been absolved of all of its old debts and doesn’t have to pay any taxes because of their special accommodations. Whatta deal!? Gamble with the people’s money while assuming no risks at all! Volt, anyone?

    Let’s not get fooled by all the spin GM and the Obama administration is putting out about how great or how bad GM is doing.

    It’s hyperbole and/or empty rhetoric because we haven’t seen GM pay back the tax payers with any of their so-called profits, while at the same time being continually underwritten by the US tax payers who cover GM’s losses. Yes, even now, because of the special tax advantages given to nationalized companies.

    • 0 avatar
      doctor olds

      @highdesertcat- You write about GM “repaying” bailout funds and “special tax advantages given to nationalized companies”, and “being continually underwritten by the US tax payers who cover GM’s losses”. All three notions are disconnected from reality.
      Blame Obama administration for the arrangement if you want, as they are totally responsible for the details. These are the facts:
      -Not a single dime is due from company operations. ALL remaining return depends on the ultimate sale price of government owned stock and nothing else. You will be waiting a very long time for a “repayment” that has never been planned in the manner you suggest.
      -There is no “special tax advantage for nationalized companies”. New GM was allowed to carry forward tax losses of old GM, and that was a quid pro quo for new GM ALSO taking on the responsibility of continuing to fund pension plans. Dumping all GM retirees on the PBGC would have resulted in much higher costs to taxpayers, who underwrite the fund.
      -GM has been generating good profits for two full years and has not received any funds beyond the amount provided to bankroll the bankruptcy restructuring.GM actually has generated $billions in cash and invested over $6B in capital improvements in America since the bankruptcy.
      You are entitled to your own opinions, but not you own facts.

      • 0 avatar
        wsn

        “-Not a single dime is due from company operations. ALL remaining return depends on the ultimate sale price of government owned stock and nothing else.”

        In that case, GM has failed miserably. It’s still more than 20% down from IPO. Let’s talk about “profit”, whether real or fictionary, when the stock goes higher than IPO + interest.

      • 0 avatar
        highdesertcat

        Olds, your spirited defense of GM and all it stands for is noteworthy for the UAW and GM fans, but not for those of us who believe that ANY failed company should die a natural death.

        The reason there was never any provision for repayment of the money poured into a failed GM is because the perpetrators of this fraud on the tax paying public knew before hand that there was no chance at all that GM would ever be able to pay back all the money the tax payers wasted on this socialist venture.

        Most of us tax payers could understand that Bush wanted to give Obama some time when Bush bailed out various failed institutions. Time to arrange an orderly liquidation of GM and Chrysler and the financial, mortgage and investment bail out recipients.

        Of course, the liquidation or give-away of GM never happened, but it did for Chrysler (with an additional $1.3Billion in bribe money to Fiat).

        So all this talk about how profitable GM is, frankly, is garbage! The money we wasted on propping up GM would have been better spent on more worthwhile causes towards the national interests. The UAW is not one of them.

        GM will fail, again, in spite of all this so-called profit money it is raking in. GM will fail again because GM is not self-sufficient or self-sustaining. GM is not a viable company. Not in the past. Not now. If there was a future to GM, its new stock wouldn’t be in the tank.

        Facts are facts. Sometimes different people interpret the same facts differently. Just like it was just prior to GM’s financial collapse and declaration of bankruptcy. Some people said bankruptcy would never happen. The more astute industry watchers predicted GM’s failure as early as 2007.

        One of the astute was my broker who advised me most strenuously in 2007 to un-ass myself from all the automotive stock I held. I sure am glad I listened to his advise instead of all the GM-fanboys who, like you, preach the invincibility of a failing GM.

      • 0 avatar
        doctor olds

        @highdesert cat- With all due respect, $9billion in operating profit is not trivial. It is in the top 2-3 highest annual profits by an auto company ever!
        Spare me you disgust over how much money this is costing you. The total loss on the GM “bailout” would be $12.9B if all the stock were sold today. That is a whopping $41.66 per American. The company has made more than that in the last two years! They have invested over $6B in America during that time as well.

        Hundreds of thousands of people across the country, though primarily in the Midwest, are gainfully employed and paying taxes.Setting aside the politics, GM is an incontrovertible success story. Only in you imagination is it a failed enterprise. You do not present a rational argument for you disdain. For the sideline chatterers here who are focused on Stock price: Just graph the GM stock price since the IPO along with Ford. You will see the two stocks are almost in lock step and Ford is actually down more than GM, as of yesterday’s close. Your broker may have had a point about auto stocks.
        Your comments are not based on facts. They are based on emotion and imagination. GM’s success and profit are both real.

      • 0 avatar
        highdesertcat

        Olds, no emotion on my part. I’m totally divested and came out way ahead.

        But I do have four brothers who were in the new-car retail business and sold, among several other brands, GM vehicles. Up until Sept 30, 2011, when they sold the dealerships, I worked very closely with them, their partners, their CPA and Attorneys.

        I attended Regional OEM sales meetings with them and have enjoyed an education in what ‘the other side’ has to go through to make a deal and make money on it. There’s a lot more to the equation than meets the eye of the buyer.

        I think it is fine for you to carry the torch for GM, and if more people had done that over the past forty years GM would not have gone bankrupt.

        I don’t share your views on GMs profitability or the possibility for any kind of repayment of tax payer money, in any form. Which means the taxpayers lose. The taxpayers are paying twice for a new GM car, once for the privilege of bailing out GM and the second time if they choose to buy a GM product.

        Even today GM is bleeding profusely and all those profits that GM is supposedly making is off-set by losses and liabilities elsewhere. Best thing for GM to do is focus on markets where the potential to make money is greater than in North America. BRIC comes to mind.

        My problem is with the bail out of failed companies, GM being one of them. If there is going to be bailing out to be done, and hand outs to be used to spread America’s wealth around, then it should be done on a more equitable basis. This was selective enrichment of the UAW at the tax payers’ expense and it didn’t keep any of the other failures afloat. Those went under.

        There is no way to justify keeping 6% of the work force, the UAW, working and living the high-life at the expense of the other 94%, in case of the GM and Chrysler bail out and nationalization.

        It’s not like we don’t have any other auto manufacturers in the US. When other US automakers went under in the past, America continued on its merry way without Packard, Studebaker, AMC, etc. We would have been better off to let all failed companies die and liquidate. Look at how many financials went under. GM could have gone the way that Chrysler did. Look at Chrysler now!

  • avatar
    Geekcarlover

    Not to seem overly snarky, but what’s the over/under on how long until the leadership of the UAW equates “record profits” and “we deserve our fair share”? Then screws the whole thing up with a strike.

    • 0 avatar
      doctor olds

      @Geekcarlover- UAW’s King has been spouting class envy rhetoric about Ford’s compensation of Mullally. It is an open question whether UAW leadership will continue to understand what Gettlefinger came to realize, albeit too late. I am hopeful they will remember the near death of the industry at the hands of the GFC and be reasonable with future contract demands. GM’s estimated $7,000 profit sharing for 2011 results should go a long way toward satisfying UAW demands for a “fair share”.

    • 0 avatar
      supersleuth

      No, you just seem overly stupid or overly a shill for super-wealthy greedheads for assuming that it’s outrageous for workers to expect a fair share of the fruits of their labors (after giving massive concessions to save the company.)

      For decades now the productivity of American workers has steadily increased but almost all of that gain has been heisted by the 1% (and most of THAT by the 0.1%). That is a fact; you could, as Yogi Berra would say, look it up.

      • 0 avatar
        wsn

        No, you just seem overly stupid to realize that any pay is fair pay when the company is still on bailout. Want higher wages? Go ahead paying off all bailout and giving everyone a 100% raise.

      • 0 avatar
        supersleuth

        And I’ll be impressed by the relevance of that point when Akerson takes a big pay cut in order to accelerate the payback. Unless you’re also calling for that, you’re not making sense. Meanwhile, you haven’t even addressed the economic facts of which I reminded you.

      • 0 avatar
        geeber

        That productivity has resulted in far better products at not much higher prices (adjusted for inflation).

        In the bad old days, wages of the workers did increase dramatically. Meanwhile, the product was steadily cheapened as the price ROSE. This was most apparent in the automobile industry. Compare a 1975 Ford or Chevrolet to its 1965 counterpart for quality of construction and materials. Then check their respective prices.

        Today you can get at 2012 Ford Focus that is better in every way than a 1980 Mercedes S-Class – it performs better, it is safer, it has standard features that weren’t available on the Mercedes at any price, it runs cleaner and it boasts better build quality. And the price is not much higher, adjusted for inflation, than the price of a fully equipped 1980 Ford Fairmont Futura.

        The workers at Ford in 2012 enjoy a factory that is cleaner, safer and more ergonomically friendly than the factory where their 1980 counterparts worked. The main disadvantage is that a lot fewer of them are needed to build the same number of vehicles.

        All of those improvements to both product and the work place costs money. So both workers and customers have benefited from productivity improvements.

      • 0 avatar
        supersleuth

        Which, geeber, has nothing to do with the graceless, hypocritical complaints about the modest profit-sharing money flowing to GM workers NOW, after those better products have proven successful and after the workers gave back a lot of the earlier gains.

      • 0 avatar
        geeber

        It has everything to do with your original point, which was that all of the productivity gains of the past 30 or so years have supposedly been hijacked by the dreaded “1 percent.” Which, as I’ve shown, is false. These productivity gains have been used to improve the product AND working conditions.

        Read what domestic auto factories were like in the 1960s and 1970s (a very good book on this subject was written by Robert Dewar, A Savage Factory. He worked at Ford’s Sharonville transmission plant in the 1970s, and the picture he paints of the condition of the factory isn’t pretty).

        At any rate, the “sacrifices” made by the UAW have been minimal at best. Giving up the Jobs Bank? Boo, hoo, hoo. In the real world, if you lose your job, you get unemployment compensation and maybe severance pay. You don’t get to sit around and collect 95 percent of your pay indefinitely.

        Having a bigger co-payment for perscription drugs? Cry me a river. That has been happening for years at other places of employmeent, including mine.

        A second tier of wages for UAW members building the Chevrolet Sonic? Americans will not pay $28,000 for cars the size of the Sonic, so it was either lower wages or an assembly point in Mexico or Asia. It is better that the car be built somewhere else?

      • 0 avatar
        supersleuth

        Not “supposedly”, it’s a well-documented fact. Real incomes have been flat for decades everywhere but at the very top of the distribution, despite large gains in productivity (and thus national income) over the same period. Your “supposedly” simply indicated that you have little idea what you’re talking about.

      • 0 avatar
        geeber

        Sorry, you are wrong.

        When adjusted for taxes paid, household size and benefits received, the middle 20 percent of wage earners experienced 36.9 percent income growth from 1980 through today. The bottom 20 percent gained 26.4 percent in income, while the second-lowest 20 percent gained 29.1 percent.

        And, as I’ve explained, a large part of the productivity gains have gone towards superior products and better working conditions. Only a dunce would argue otherwise.

        This is not in dispute, unless you are going to argue that a 2012 domestically made car is superior to any 1980 car of the same price (adjusted for inflation), or that working conditions have deteriorated between 1980 and 2012.

        Which should provide this week’s source of unintentional hilarity, if nothing else.

  • avatar
    timmruss

    You guys should be fools to take Bertel seriously.

    Don’t you realize (from ay of his past posts) that he is a former paid currently volunteer VW/Audi brand in particular-German cars in general spokes person with NO sense of objectivity? To him Japanese industry is is in shambles and Americans, forget about them

    I have no clue what a troll like him is doing at the truth about cars (oh I forgot, he is the chief editor)

    His only agenda is to manipulate people to believe that German auto industry is the best, biggest and the only.

    I only read him to get a kick out of his increadble BIAS. You should too.

  • avatar
    timmruss

    You guys should be fools to take Bertel seriously.

    Don’t you realize (from ay of his past posts) that he is a former paid current volunteer VW/Audi brand PR person with NO sense of objectivity? To him Japanese industry is in shambles and as for Americans just forget about them.

    I have no clue what a troll like him is doing at the truth about cars (oh I forgot, he is the chief editor)

    His only agenda is to manipulate people to believe that German auto industry is the best, biggest and the only.

    I only read him to get a kick out of his increadble BIAS. You should too.

    Hey Bertel, how is the homeland doing with the consequtive third in recession soon to go under depression when you loose all your favorite clientele in Europe being sucked dry?

    Will your auto industry (actually hated by most Germans) save the country in hard times when people show a finger to “manufactured lifestyle” created by your luxury auto industry?

    Yeah, I didn’t think so too.

  • avatar
    jhott997

    timmruss,
    Where do you work at GM?
    You write like many bitter GM employees that I know. Are you one of the folk that just had their pension frozen? How’s that loyalty to GM working out for you?

    • 0 avatar
      doctor olds

      @jhott997- I AM a GM salary retiree and have to defend timmruss for cutting through the BS!
      I stumbled on this site and was amazed at the negative spin. Some folks here have been writing that GM would quickly fail again. They were wrong!
      They wrote that GM would come back to the well for more government assistance. They were wrong!
      They wrote that GM makes cars no one wants. They were wrong. GM actually gained substantial share in America, made great profit here, and sell far more cars everywhere but Japan than any other car maker. If no on wants them, why do they sell so many more than anyone else?

      • 0 avatar

        it’s called sudden acceleration, tsunami and flood. GM US market will drop to 15% this year. without the gov’t bailout and mother nature they would never had made any progress. suppose one could also make a case against counting 100% of Chinese deliveries when only owning half the company. this year the Koreans, Germans, and Japanese will surge and GM will tank…

      • 0 avatar
        mike978

        Buickman – do you still sell Buicks and/or other GM vehicles? Lets see if you are right in early January 2013 when we know the full 2012 figures (although January 2012 was above 15%). The data will inform us.

      • 0 avatar
        jhott997

        I get it. I understand why you have an interest in positive spin for GM.
        However, don’t rant on here about Bertel’s supposed “bias against GM” when you have CLEAR interest and bias FOR GM. It is just silly.

        It is a process for GM.
        You of all people should know that things move S-L-O-W-L-Y inside GM.
        I am one who believes that GM did not make the required changes, internally, to actually CHANGE anything about their future.
        GM is doomed to fail again because of their resistance to internal change. It’s not about “jobs” or obama vs bush vs romney or anti-uaw whatever. It’s about GM and it’s inevitable march towards a much, much smaller company.
        The same people, making the same decisions leads to the same results. There is a running joke inside GM that the “executives are moving around the chairs on the deck of the ship” and calling it “change”. Same chairs, different position, ship is still taking on water.
        You can believe the propaganda all you want but believe that GM is on a slow decent. GM is too big, too much capacity and too filled with people more interested in getting paid every two weeks than actually worrying about the product.

        Yes, GM sells A LOT of cars. I get it. Unfortunately selling a lot of widget X does not mean the manufacturer of the widget is healthy. Remember, GM was “#1” all the way to its managed bankruptcy.

        GM has a long road to haul and is NOWHERE near out of the storm. GM deserves a very critical eye at this point.
        Fundamentally, GM must answer these questions:
        What is a Chevrolet?
        What is a Buick?
        What is a Cadillac?
        What is an Opel?
        All the pontificating and blogging by cheerleaders who only see the positive in GM does not answer those fundamental questions. Example: what the hell is the Buick Regal and were does it fit in the market? Where does Buick fit in the market for that matter? Don’t respin the typical GM talk-points. As a brand Cadillac is just as convoluted and the ATS ad that ran during the Super Bowl is an example.
        Until those four questions are answered clearly and coherently in a way the customer understands unambiguously then I am afraid the slow rot of GM, from within, will continue.

        I happen to agree with Buickman. 2012 is going to be an interesting year for GM. This is a year where they must manage market share v. incentive spending. It will be interesting.

        Finally doctor olds, it might be refreshing for you to look at GM with a more critical eye.

      • 0 avatar
        doctor olds

        @jhott997- Your presumptions regarding GM are interesting. Since you actually had no experience inside the company, or any other carmaker,I’ll wager.
        I had 40 years. I was with Oldsmobile during the divisions unparallelled success and eventual failure, the last 37 years of the divisions 107 year life.
        I do know very well the reasons for the decline, product, product and product.
        Unlike most here, I also have a very clear and detailed understanding of how the company continually worked to refine its operations to correct the ills so rightly worked criticized. In addition, I have a deep understanding of the actual impacts of a union monopoly on the industry and adversarial government policies.
        I don’t share my criticism of GM publicly.
        I do try to bring real data and facts to these discussions. Only time will tell whether GM is “out of the woods”, but the real data shows they are heading in the right direction.

      • 0 avatar
        geeber

        Where has GM gained substantial market share? The figures I’ve found for GM’s market share in the United States during 2008-11 are these:

        2008: 22.1 percent
        2009: 19.7 percent
        2010: 18.8 percent
        2011: 19.4 percent

        I’m not seeing a consistent increase in market share. I understand that the elimination of three major brands – HUMMER, Pontiac and Saturn – since 2008 has had a negative impact on market share. But, I’m certainly not seeing any explosive growth in share, either.

        And note that GM held down the number-one slot in sales in the United States right up until the point it declared bankruptcy. So size doesn’t always matter.

      • 0 avatar
        doctor olds

        I consider the .6% share gain for 2011 substantial, particularly when compared with Ford’s decline in share. I certainly can’t say it is a trend, being just one year. That .6% share represents 1/2 to 2/3 the total volume of an Acura,Infiniti,or Audi. You are right to note that GM’s share did decline during the auto collapse and as they went through bankruptcy.
        This year should start to tell if the growth can be sustained. There are a number of new products that should help.

  • avatar
    doctor olds

    @Buickman- funny how you diminish the political tsunami’s affect on General Motors, who cut 1/2 their nameplates and are clearly hated by many who comment here.
    You have been singing this one note for years now, always claiming their recent progress is a fluke. You have been consistently wrong in every detail.
    GM continues to get stronger and is growing around the world. The impact of the bankruptcy and restructuring trivializes Toyota and Honda’s struggles with production capacity.
    As a staunch conservative, it pains me to describe the fools on the right who can not appreciate the $9.2B operating profit that GM generated last year, near the highest profit of any automaker ever. #1 VW only hit $10B in profit once.

    • 0 avatar
      alluster

      I would rather have GM earn record profits even if it costs them some market share or volume. All the North American plants are running at near 100% capacity and with no capacity added in the near future and the market expected to rise substantially, GM is better off holding the line on price. Market share and sales crowns at any costs are the kind of a** backwards thinking that got GM bankrupt in the first place. Let Toyota take back the sales crown and earn a paltry billion or two every year.

      It does seem like GM is serious about profits rather than market share or volume. They are shooting for 10% margins like BMW, which is not real easy for volume manufacturers. I am surprised no one has realized what GM did in January, which i hope they continue for the rest of the year. Yes sales were kinda flat and market share dropped a bit., but GM cut incentives by $700 per car and raised transaction prices by $1000 a car. That is a net of $1700 more earned per car than last January. With sales nearly flat at 169,000 Units, GM raked in $285 Million more just for January. If they keep up that performance till years end, we are looking at $3.4B more in profits compared to 2011, just in the US. This equation will only improve from this point, with the heavily discounted 2012 Malibu being replaced by the non discounted 2013 Model in addition to all the low profit cars like the HHR, Lucerne, and DTS phased out for 2012.

      So I say to GM, screw market share. Let Toyota and Japanese keep the bragging rights until Toyota implodes due to the strong yen or aging Japanese population due to infertile men.

      • 0 avatar
        doctor olds

        @Alluster. Interesting analysis. $10.6B profit will come from
        North America alone this year, at that rate, and it assumes the market will be flat. If GM just maintains share and the market climbs to 14M, the results will be amazing. I predict GM will gain share again in 2012. I would not assume they don’t have plans to increase capacity surprisingly quickly, should the market demand.

      • 0 avatar
        geeber

        “What GM did in January” was increase sales to fleet customers while still experiencing a drop in market share.

        GM fleet sales rose to 30 percent of GM’s total sales, up from 22 percent in January 2011. This was even ahead of Ford’s figure (29 percent, down from 30 percent a year earlier). And Ford dominates the more desirable fleet sales – those to government units and corporations (as opposed to rental car companies).

        I’m not so sure that GM wants to use the January formula for the rest of 2012.

      • 0 avatar
        NormSV650

        Or Toyota’s almost 50% increase in rental cars for January 2012. Still waiting for Bertel’s spread on this topic.

        http://www.miamiherald.com/2012/02/14/2641200/toyota-boosts-us-sales-with-rental.html

        Toyota is pushing almost $2,000 on each car it sold last month. Rentals, fleets, incentives…who wants a Toyota? Oh, Bertel?

      • 0 avatar
        Pch101

        ““What GM did in January” was increase sales to fleet customers while still experiencing a drop in market share.”

        Yep. Comparing January 2012 to January 2011, we know this much:

        -GM deliveries fell from about 179,000 to 168,000, a decline of about 6%

        -According to NADA, total US vehicles sales increased over that same period by 11.2%. Therefore, GM total market share fell from 21.9% to 18.5%

        -GM reports that its retail sales fell by about 15%. That should equal a retail decline of about 21,000 units

        -Based upon that, we can surmise that GM must have increased fleet sales by about 10,500 units, an increase in fleet of about 27%.

        -Chevrolet overall US sales were down 1.2%, a modest decline compared to GM’s overall US decline of 6.1%. Chevrolet’s retail sales declined by 14.7% over this same period. Yet Chevrolet’s passenger car sales increased by 13%. This strongly suggests that Chevy cars are getting dumped into fleets. Malibu, Impala and Cruze sales were up, and Sonic sales for January 2012 were well above those of the Aveo sales for January 2011, so it isn’t much of a challenge to guess which nameplates are going to fleet.

      • 0 avatar
        Pch101

        “Toyota is pushing almost $2,000 on each car it sold last month.”

        You need to work on your math. According to Edmunds, TMC was at $1426 per unit, below the industry average of $2141.

        GM was at $3171. That’s obviously well above the industry average, and more than double that of TMC.

        http://static.ed.edmunds-media.com/unversioned/img/car-news/data-center/2012/feb/tci/2012-02-tci.xls

        “Or Toyota’s almost 50% increase in rental cars for January 2012.”

        You really ought to read your own links: “Toyota says the higher fleet sales won’t be a long-term trend. It says it’s making up for contracts it couldn’t fulfill last year after Japan’s earthquake limited car production…The company expects to sell less than 10 percent of its vehicles to fleets in 2012, spokesman Steven Curtis said.” Given TMC’s track record with fleet sales, that claim isn’t out of line.

  • avatar
    doctor olds

    @supersleuth- Whether you like it or not, GM will NOT be paying anything from operations, other than $billions in ongoing employee supplier and dealer employee income taxes. Criticize Obama, he set the conditions of the deal.
    BTW- you betray a naivete’, along with others here, to hammer Akerson as somehow responsible for GM’s failure. After all,
    he was installed by the board created by the auto Task force to run GM after the old leadership were ousted.
    Rather foolish, illogical and outdated

  • avatar
    alluster

    I made this little chart (old GM vs New GM) explaining why GM is profitable now. Sources, wikipedia, WSJ, Reuters etc

    Old GM New GM

    Debt: $94.5 B $4.7 B
    Cash on Hand: $14 B $40 B
    Global Employment: 266,000 208,000
    US Employment: 91,000 68,000
    UAW Employment: 62,000 49,000
    Tier 2 workers – making 14$/Hr: 0 6,400
    US Dealers: 5,900 5,000
    US Brands: 8 4
    US Plants: 47 34
    US Models: 86 49
    ATP of vehicle sold in US: $28,000 $32,000
    Cost to sell 2 Million cars: $41 B $31 B
    Global Production (Units): > 8 Million > 9 Million
    Interest Income on cash: 0 500 Million
    Interest paid to service debt” > $1 B a year 0
    Loans: Loan from Bush administration written off
    Tax Savings: $ 18 B in future tax write-offs

    http://www2.picturepush.com/photo/a/7613915/img/7613915.bmp

    • 0 avatar
      doctor olds

      @Alluster- Thanks! It is refreshing to see actual data upon which to found opinion. It drives me up a wall to read so many comments from folks who don’t bother to let facts or data tell them what is real.

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