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General Motors Company Posts $1.2 Billion Loss

It will pay back first $1.2 billion to taxpayers next month.

by on Nov.16, 2009

The full costs of health care have not yet been accounted for.

The full costs of health care have not yet been accounted for, or the value of the stock.

General Motors Company (GM) released today preliminary results for its first 83 days of operation, providing an initial look at its still tenuous financial health.

GM’s earnings before taxes for the July 10-Sept. 30 period resulted in a loss of $1.0 billion since it began operations as a reorganized company on July 10.

GM recorded special items for the same period of $505 million, attributed primarily to dealer restructuring, attrition-related charges and Delphi.

For the July 10-Sept. 30 period GM posted a loss after taxes of $1.2 billion.

The results did not conform to Generally Accepted Accounting Procedures (GAAP), which are required of publicly traded companies in the U.S. , since GM is privately held, largely by taxpayers.

In spite of its restructuring, the company is not yet at a break even point, according to Fritz Henderson, CEO, primarily because of costs, including the enormous cost of  health care in the U.S.

Henderson characterized the results as “not satisfactory.”

General Motors Company Q3 2009 Unaudited Non-GAAP Results

“Old GM”July 1-July 9, 2009 GM July 10-Sept. 30, 2009
Net revenue $1,637 $26,352
Earnings before interest and taxes (before special items) $(627) $(261)
Net interest $(209) $(250)
Special items (1) $79,672 $(505)
Earnings before taxes $78,836 $(1,016)
Taxes $522 $(135)
Total managerial income/(loss) $79,358 $(1,151)
Managerial operating cash flow (before special items)($bils) $(3.6) $3.3
Global cash and cash-related balance ($bils) $37.6 $42.6
(1) Special items for July 1-July 9, 2009 includes a reorganization gain of $80.7 billion.
Dollars and Sense!

Dollars and Sense!

The revenue, cost and cash flow numbers are indicators of GM’s actual health. These and subsequent results are needed to gauge the effectiveness of the reorganization imposed on it by the U.S. Treasury Department, and to assess the likelihood of how much U.S. and Canadian taxpayers will be paid back of  the $50 billion in loans advanced via their ownership stake of 61% of the company.


GM Will Release Third-Quarter 2009 Results

Data needed to gauge the effectiveness of the reorganization.

by on Nov.12, 2009

The chairman actually works for the taxpayers, who need results to have their loans paid back.

The chairman actually works for the taxpayers, who need results to have their loans paid back.

General Motors Company plans to release its third quarter 2009 preliminary results on Monday morning, November 16, 2009.

The newly restructured company has not published financial results since it entered the bankruptcy process earlier this year in May. The results will cover the period from July 10, when it emerged from bankruptcy, through September 30 of this year.

In its bankruptcy filing, GM said it lost $88 billion between the end 2004 and the first quarter of this year. Analysts expect the company to again lose money but are uncertain as to the amount.

The company also will release figures starting in January 2009 and ending July 9 for the old General Motors Corporation, which remains in bankruptcy and is being liquidated.

The privately held company will not provide numbers that adhere to generally accepted accounting principles as required by the Securities and Exchange Commission for publicly held U.S. firms.



Still, revenue, cost and cash flow numbers would be indicators of its actual health. The results are needed to gauge the effectiveness of the reorganization imposed on it by the U.S. Treasury Department, and to assess the likelihood that U.S. and Canadian taxpayers will be paid back, some if not all of, the $50 billion in loans advanced via their ownership stake of 61% of the company.


General Motors Company Arises from the Ashes

The new GM launches today, just 40 days after bankruptcy.

by on Jul.10, 2009

Fritz Henderson, CEO GM Company, photo TBD

The speed of the bankruptcy proceeding could not be matched by an impending reorganization plan.

General Motors Company, or the new GM, is abandoning the old way of doing business that drove it into bankruptcy, according to its CEO. He also will streamline its organization, focus on “best in class” products and attract enough customers to stop its sales slide.

The U.S. taxpayer-owned company is expected to go public by the middle of next year. And GM wants to pay off its U.S. loans that are currently keeping it afloat well before the required  2015 date.

These are all extremely ambitious goals, to put it politely, coming from a management team comprised almost entirely of old-line GM executives who set the policy and made the decisions that resulted in the largest corporate bankruptcy in U.S. history.

“One thing we have learned from the last 100 days is that GM can move quickly and decisively,” said Fritz Henderson, CEO. “Today, we take the intensity, decisiveness and speed of the past several months and transfer it from the triage of the bankruptcy process to the creation and operation of a new General Motors.”

The problem confronting GM — new or old — is the continuing decline in production, sales and share in the toughest vehicle market since WW2.

Keep up with the Reorganization!

Keep up with the Reorganization!

Little new ground in the all critical product or cost cutting areas was covered by Henderson in his first press conference as the operational head of GM Company, which was created today by an asset sale approved by a bankruptcy court in New York on July 5th. In fact, the cliche’s of a product and customer focused organization, repeated over and over, seemed more suitable for an internal pep rally than for a news event after a near death experience for a  company whose future is still by no means assured.

Even the claim that GM can move quickly was cast in doubt by the lack of detail in just how GM is going to trim its bloated corporate ranks.  Henderson’s new management organization was being prepared in anticipation of a July 31st closing date, and the restructuring could not keep pace with the swiftness of the bankruptcy proceeding.


A Closer Look at the General Motors Asset Sale just Approved by the U.S. Bankruptcy Court

Yes, an appeal has already been filed. The outcome will almost certainly be the same as with Chrysler. GM's sale will proceed.

by on Jul.06, 2009

Ex GM Chairman and CEO Rick Wagoner,center, Ex GM Vice Chairmen Bob Lutz, left, and survivor Fritz Henderson, right

General Motors Company will be headquartered in Detroit and led by Fritz Henderson as the president and chief executive officer.

The U.S. Bankruptcy Court for the Southern District of New York approved the sale of almost all of General Motors Corporation’s assets to NGMCO, Inc., a new legal entity funded by U.S. taxpayers for about $51 billion. An appeal by product liability lawyers is unlikely to halt the sale at noon on July 9th. 

When the sale closes, during the next week, NGMCO, Inc. will change its name to General Motors Company and continue to operate much like GM did in the past, albeit with only four core brands, and far fewer employees and dealers. Current GM employees will be offered positions by the new company. The current General Motors Corporation will then change its name to Motors Liquidation Company. It will ultimately be dissolved under direction of the court.

Stay auto news solvent!

Stay auto news solvent!

General Motors Company will be headquartered in Detroit and will be led by Fritz Henderson as president and chief executive officer. Edward E. Whitacre, Jr. is chairman of the board of directors. 

Also selected to serve on the board of directors are six current members of the GM Corporation board — Erroll Davis, Neville Isdell, Kent Kresa, Philip Laskawy, Kathryn Marinello and Fritz Henderson. 


GM to Shut Louisiana Plants by 2012

The bankrupt company confirms plans to close its assembly and stamping plants in Shreveport no later than June 2012.

by on Jun.24, 2009

May 2005: HUMMER H3 from Shreveport arrrives at Orr HUMMER

It's probably just a question of time before the Chinese move Hummer tooling home.

GM spokesman Tom Wilkinson said Wednesday that the company filed documents late Tuesday in U.S. bankruptcy court in New York saying the Shreveport complex, employing 950 people, had been assigned to the old GM.

Shreveport had previously been left off the list of old plants not needed because GM was still in the midst of negotiations for the sale of Hummer to Sichuan Tengzhong Heavy Industrial Machinery Company.

The deal with the Chinese truck makers is expected to close in the third quarter, subject to court and regulatory approvals.

Members of UAW Local 2166 assemble the H3T, the first midsize pick-up truck from HUMMER that carves out a new niche in the truck market.

Members of UAW Local 2166 assemble the H3T, the first midsize pick-up truck from Hummer that was supposed to create a new niche in the market.

As part of the deal, GM has agreed to continue building the H3 and HT for the successor company until 2012.

GM will also halt production of the Chevrolet Colorado and GMC Canyon built there by the summer of 2012.

Wilkinson was careful not to say GM was dropping out of the compact truck market. “We’re not saying where those will go,” he said. “We’re not saying what the next step is,” (for mid-sized pick up trucks) he said. “It’s a fairly complex issue,” he said.

Subscribe to TheDetroitBureau.comMeanwhile, union officials at the plant, who thought they had dodged a deadly bullet three weeks ago when GM filed its original bankruptcy petition, said they were in shock.


U.S. Government Buys Big Three Cars

Chrysler, Ford and GM benefit from Federal fleet order.

by on Jun.11, 2009

Paul Prouty, Acting Administrator o The General Services Administration

The $210 million fleet order is the latest taxpayer gift to the ailing Big Three.

The Obama administration is pushing ahead its plans to purchase more than 14,000 new vehicles from General Motors Corporation, Ford Motor Company and Chrysler Group LLC. Earlier in the week, with the economy continuing to falter, Obama asked various U.S. agencies to step up spending of the $787 stimulus package approved by Congress back in February.

Obama also said the order represents part of the administration’s effort to bolster both domestic automakers and suppliers, who have been hit hard by the recession. Auto production in the U.S. has dropped by almost 40% this year, and shows no signs of reviving.

The U.S. General Services Administration has ordered 14,105 vehicles for the Federal fleet using $210 million of funds from the American Recovery and Reinvestment Act.

The new order, placed June 1, brings the total number of fuel efficient vehicles ordered by GSA using ARRA funds to 17,205 at a taxpayer cost of $287 million. The order includes 2,933 Chrysler vehicles worth $53 million; 7,924 Ford vehicles for $129 million; and 6,348 General Motors vehicles for $105 million.

The American Recovery and Reinvestment Act of 2009 (Recovery Act) was signed into law by President Obama on February 17, 2009. The administration  calls it “an unprecedented effort to jump start our economy, create or save millions of jobs, and put a down payment on addressing long-neglected challenges so our country can thrive in the 21st century. The Act is an extraordinary response to a crisis unlike any since the Great Depression, and includes measures to modernize our nation’s infrastructure, enhance energy independence, expand educational opportunities, preserve and improve affordable health care, provide tax relief, and protect those in greatest need.”

“This order represents just one of the multiple ways we are helping our customers meet their economic recovery and green government initiatives,” said Acting GSA Administrator Paul F. Prouty. (more…)

GM Dumps Medium Duty Trucks

Not a buyer in sight for the declining business.

by on Jun.08, 2009

Chevrolet Kodiak 2009

Production of the Chevy Kodiak and GMC Topkick medium duty trucks will cease by July 31, 2009.

General Motors Corporation dumped another business today as it announced plants to halt production of medium-duty trucks in Flint, Michigan, at the end of this July.

GM’s decision was forced by the swift and precipitous decline in the value of automotive related assets around the U.S. In the end, GM simply couldn’t find a buyer for the business. 

 “After four years of working with multiple potential buyers, General Motors has decided to wind down its medium-duty truck operations,” the company said in a statement.

Production of the Chevy Kodiak and GMC Topkick will cease by July 31, 2009.

Last August, Navistar, the Chicago-based truck company, backed out of a deal to acquire GM’s medium-duty truck operation.

The move will eliminate the jobs of 398 hourly and salaried employees now assigned to medium-duty line at GM truck assembly plant in Flint, GM officials said. (more…)

GM Bankruptcy Plan Includes UAW Lobbying Organization for Health Care Reform

Protection is asked for funding for what will largely be a taxpayer-financed organization that includes Chrysler and Ford.

by on Jun.08, 2009

While the union preserved active woker benefits for the moment at GM, retirees took a a bit hit. Mor ecuts could be on the way.

While the union preserved active worker benefits for the moment at GM, retirees took a a big hit. More health care cuts could be on the way.

The United Auto Workers Union in its revised contract with bankrupt General Motors is attempting to establish a lobbying organization funded by the automaker that would push for health care reform. Ford Motor Company and New Chrysler would contribute as well.

GM has agreed to provide funding of $3 million annually for five years to a “National Institute for Health Care Reform,” provided that Ford and Chrysler participate with proportionate funding.

GM CEO Fritz Henderson told TDB that, “We are committed to go ahead with the Institute,” even though he didn’t know the status of Ford and Chrysler contributions. “There has to be change in the health care system,” Henderson said.  Henderson disagreed with our lobbying designation, insisting  that the Institute is a research group.

The Institute  funding, of course, will be largely taxpayer supplied since the U.S. Treasury will hold majority stakes in GM and the Chrysler Group when they emerge from bankruptcy.

The new push comes at a time when the national debate on health care is heating up, as President Obama tries to fulfill his campaign promise to reform a system that spends more money and produces worse results when compared to any other industrialized nation. We are now facing skyrocketing costs, massive numbers of uninsured people and the ongoing problem of profit-driven decision-making on the delivery of health care.

Almost 47 million Americans are without health insurance, and the cost of providing medical services from a private, for-profit system is rising at an unsustainable rate. This  is forcing businesses to increasingly trim or eliminate benefits for workers with health care — precisely what is happening at the auto companies.

The revived union initiative is taking on new urgency since the UAW has now assumed enormous risks on behalf of its one million retirees and dependents whose health care will be financed by Voluntary Employee Beneficiary Associations (VEBA) run by the union, funded in part by automaker stock.   (more…)

GM Small B-Car Developed. Plant Selection Lags

The company vows to announce the U.S. site by summer's end.

by on Jun.05, 2009


The Pontiac G3 B-car is built in Mexico, and derived from a Korean-designed Daewoo platform.

General Motors Corporation is now committed to building a new small car in the U.S. sooner rather than later, following the intervention of the United Auto Workers and the U.S. Treasury, which persuaded, if that’s the right word, GM to build the car in the U.S. rather than China or South Korea.

However, it’s pretty clear that the new car will be based on the current B-car platform developed by Daewoo Automotive Technologies or DAT for worldwide distribution.

GM had hesitated bringing the subcompact car to the U.S. for fear it was too small for the U.S. market, but it had done the engineering required to meet U.S. safety regulations as gas prices spiked in the last couple of years.

GM, however, is now fully prepared to assemble the car in the U.S.    (more…)

GM Pulls Ahead U.S. Plant Closings

Doomed are 14 manufacturing plants and three warehouses.

by on Jun.01, 2009

Pontiac Solstice and Saturn Sky are gone so Wilmington closes this July.

Pontiac Solstice and Saturn Sky and an Opel derivative are now gone, so Wilmington closes this July. As recently as 2006 it ran three shifts.

General Motors Corporation has just announced details of its accelerated plan to shed unused capacity as its market share continues to drop. The latest manufacturing plan reduces GM’s total number of assembly, powertrain and stamping facilities in the U.S. from 47 in 2008 to 34 by the end of 2010 and 33 by 2012.

GM says that under this plan, the “New GM” will achieve full capacity utilization of its assembly operations in 2011, two years ahead of what was scheduled in its Feb. 17 viability plan that was rejected by the Obama administration.

The latest moves, along with today’s bankruptcy filing will result in lower fixed costs per vehicle sold, and more efficient capital investment, the company claims.

The New GM, under agreement with the U.S. Treasury, will consist of GM’s strongest operations and brands from around the world, resulting in substantially less debt and lower operating costs than GM historically has carried. Whether it can turn around decade’s worth of share loss remains to be seen.

“Our manufacturing operations, which already are among the most productive in the industry, will emerge even leaner, stronger and more flexible, as part of the New GM,” said Gary Cowger Group Vice President of GM Global Manufacturing and Labor Relations. “Flexible manufacturing enables us to quickly respond to consumer preferences and changing market conditions.”    (more…)