General Motors Announce $15billion Quaterly Loss.

[blankster]

BBC News website latest news ticker:.......General Motors announce $15billion quaterly loss.

I re-checked - it does say $15bn, not $15m

This is too big to be considered off-topic.

Edited August 1, 2008 by blankster

[frozen_out]

I really don't understand this. In kindergarten terms can someone explain how a business can lose $15 bn but still be running? What does it take for a company to go bankrupt?

[Sheer Heart Attack]

F**king hell!

That's on top of GMAC's $2.5bn loss in their second quarter.

[blankster]

It's on Bloomberg too now: http://www.bloomberg.com/apps/news?pid=206...refer=worldwide

It's absolutely staggering. $15 billion loss in 3 months.

Edited August 1, 2008 by blankster

[Sheer Heart Attack]

I really don't understand this. In kindergarten terms can someone explain how a business can lose $15 bn but still be running? What does it take for a company to go bankrupt?

If you owe the bank $10,000, it's your problem. If you owe the bank $15bn, it's their problem.

Or something like that.

[blankster]

We must be getting closer to governments pressing the 'reset' button and ordering mass write-offs of debts including mortgages.

[WiseBear]

Didn't they lose $38bn last quarter?

This is a big improvement - expect the market to rally.

Buy Buy Buy (that's you not me )

[Optobear]

If you owe the bank $10,000, it's your problem. If you owe the bank $15bn, it's their problem.

Or something like that.

I think that GM own banks.

It is a staggering loss, it really shows the way for the US economy in terms of spending. There is an expression "when the US catches a cold, the whole world sneezes". What happens when the US develops pneumonia? Is this event even bigger than 1929?

[bobthe~]

But that is more than their entire net worth isn't it?

Edit to add:

not sure where I heard that now, it is brobably pollocks

Edited August 1, 2008 by bobthe~

[Optobear]

We must be getting closer to governments pressing the 'reset' button and ordering mass write-offs of debts including mortgages.

Don't think they can order mass write-offs. Otherwise they are ordering pension funds to give up their assets.

The other route involves printing money, but that doesn't work (ask Zimbabweans). No, poverty for a generation or two is the only route out.

[yellerkat]

Didn't they lose $38bn last quarter?

This is a big improvement - expect the market to rally.

Buy Buy Buy (that's you not me )

Yep, cue mahoosive Wall Street rally. Party Time!

[frozen_out]

I think that GM own banks.

It is a staggering loss, it really shows the way for the US economy in terms of spending. There is an expression "when the US catches a cold, the whole world sneezes". What happens when the US develops pneumonia? Is this event even bigger than 1929?

I still don't get it.

Where is the money coming from? Where is it going? can't someone, somewhere just say 'actually enough is enough, we're shutting you down'. Is this money all borrowed from a bank?

[interestrateripoff]

Read somewhere they have nearly $20bn in cash and this was supposed to see them through to nearly the end of Oct 2009 at the rate they where burning cash.

[interestrateripoff]

http://www.upi.com/Business_News/2008/07/0...87401215626488/

DETROIT, July 9 (UPI) -- Financial analysts are asking whether the largest U.S. automaker, General Motors (NYSE:BGM) Corp., has enough cash to see it through the industry's latest downturn.

As consumers flock to more fuel-efficient vehicles, General Motors has announced cuts in its workforce and plant closings, The New York Times (NYSE:NYT) reported Wednesday.

But, the consumer's rapid change from large to small vehicles may force GM into a slump that runs deeper than its cash reserves can handle, some auto industry analysts say.

"GM needs cash to finish the job," consultant John Casesa of Casesa Shapiro Group told the Times.

The company has $23.9 billion in cash reserves and a $7 billion line of credit, the Times reported.

Analysts estimate GM is losing $1 billion each month, meaning it would have enough cash to survive until the end of 2009

Senior GM executives are not commenting on the company's finances until a plan of action is made public, GM spokesman Tony Cervone said.

Industry analyst, Himanshu Patel of J. P. Morgan Chase, said GM may need to borrow $10 billion.

But, Patel said GM has options. "GM is burning cash fast, but it still has many unencumbered assets that can be borrowed against," he said. .

Edited August 1, 2008 by interestrateripoff

[Imp]

Don't forget, these big american car companies are really pension funds with a car making side line. These big losses could just be a write down of their pension funds.

[interestrateripoff]

http://www.washingtonpost.com/wp-dyn/conte...news⊂=AR

DETROIT -- General Motors Corp. said Friday its losses widened to $15.5 billion in the second quarter as North American sales plummeted and the company faced expenses due to labor unrest and its massive restructuring plan.

The loss of $27.33 per share is the third-worst quarterly loss in the automaker's history. In the same period a year earlier, GM recorded a net profit of $891 million, or $1.56 per share.

Revenue for the April-June period was $38.2 billion, down $8.5 billion from a year earlier.

The company said its loss included $9.1 billion in one-time charges, including $3.3 billion for the buyouts of 19,000 U.S. hourly workers, most of whom left at the end of June, as well as $2.8 billion in liabilities related to Delphi Corp., its former parts division.

It also included $1.3 billion worth of write-offs because of a decline in the value of GMAC Financial Services' portfolio of trucks and sport utility vehicles. GM owns 49 percent of GMAC, which has suffered big losses when leases end and it tries to sell the now-unpopular vehicles at depressed prices.

GM also took a $197 million charge related to the settlement of a nearly three-month strike at supplier American Axle and Manufacturing Holdings Inc., which hurt production at more than 30 GM plants. GM agreed to help American Axle fund worker buyouts as part of the settlement.

Without the one-time charges, GM lost $6.3 billion, or $11.21 per share. Twelve analysts surveyed by Thomson Financial predicted a $2.62 per share loss on revenue of $44.57 billion.

GM shares fell 7.4 percent to $10.25 in premarket trading from a close of $11.07 Thursday.

Ray Young, GM's chief financial officer, said the company burned through $3.6 billion in cash during the second quarter, which he attributed largely to reducing the company's inventory by nearly 90,000 vehicles to less than 800,000.

He said GM does not expect a similar reduction in future quarters, so the cash burn should be smaller for the rest of the year.

"In that respect, the negative cash flow in the second quarter is overstated," he said.

Young said GM ended the quarter with $21 billion in cash and $5 billion available through credit lines for total liquidity of $26 billion, which he called a strong position. The company had $23.9 billion in cash at the end of the first quarter.

[blankster]

The Dow seems to have taken this in its stride, or has it merely killed a rally that would have occurred otherwise today?

Edited August 1, 2008 by blankster

[interestrateripoff]

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Aug. 1 (Bloomberg) -- U.S. stocks fell, adding to two months of losses for the Standard & Poor's 500 Index, after results at General Motors Corp. and NYSE Euronext disappointed investors and oil prices jumped by $4 a barrel.

GM, the biggest U.S. automaker, slumped after posting a $15.5 billion loss on plunging U.S. sales. NYSE Euronext dropped the most since June, sending financial shares to a second straight retreat, after record trading at European exchanges failed to boost earnings above analysts' projections. Macy's Inc. and Expedia Inc. led retailers lower after the jobless rate climbed to 5.7 percent in July and oil rallied.

The Standard & Poor's 500 Index declined 7.96 points, or 0.6 percent, to 1,259.42 at 11:23 a.m. in New York. The Dow Jones Industrial Average lost 71.97, or 0.6 percent, to 11,306.05 and the Nasdaq Composite Index slipped 27.4 to 2,298.15. Almost two stocks retreated for each that rose on the New York Stock Exchange.

``The economy is slowly rolling over,'' said Charles Knott, who oversees $800 million as chief investment officer at Knott Capital Management in Exton, Pennsylvania. ``We're prepared for more on the downside and continue to be very cautious. If we have a sustained recession, GM and Ford are in a heck of a lot of trouble.''

Maybe not quite in their stride?

[Red-Cardinal]

Accoring to the BBC:

"It is the third biggest quarterly loss in the carmaker's history."

http://news.bbc.co.uk/1/hi/business/7537283.stm

[interestrateripoff]

http://www.guardian.co.uk/business/2007/no...almotors.usnews

The scale of the crisis gripping the American motor industry was laid bare yesterday as the struggling carmaker General Motors dived $39bn (£18.5bn) into the red in one of the worst losses ever reported by a multinational corporation.

After losing money for three years and with no immediate prospect of returning to the black, GM was forced to write off the value of billions of dollars worth of tax credits, which are worthless unless the company makes a taxable profit.

The loss, which is roughly equivalent to the gross domestic product of Bulgaria, spooked Wall Street and sent GM's shares down 4% during early trading in New York, although the company insisted that it was little more than an accounting adjustment.

That was at the end of last year, that's why $15bn for only a quarter isn't so bad.....

They must employ some very good accountants. They had better be careful as the banks might head hunt them to improve banking losses.

[right_freds_dead]

wow. they need to do something really qquickly to turn this around.

mmm...how about....a massive production line re-design to make a huge V8 monster family truck called Eddie 5.0 ?

[AteMoose]

GM have been making massive looses in the billions for years, and I believe they were classed as junk status in about 04/05? having said I believe they hundreds/thousands of billions in assets as well as having ALOT of debt..... If GM died it would take out the world economy but I think it is too big...

Edited August 1, 2008 by moosetea

[interestrateripoff]

GM have been making massive looses in the billions for years, and I believe they were classed as junk status in about 04/05? having said that they hundreds/thousands of billions in assets..... If GM died it would take out the world economy but I think it is too big...

Aren't asset prices falling??? What does GM own that it can flog or borrow against.

Surely GM can't borrow it's way out of trouble? That seriously can't be a business plan as it will never make enough money to cover the interest repayments unless is borrows more money to cover the debt.

Sorry that's been the West's economic plan for decades hasn't it???

[AteMoose]

Aren't asset prices falling??? What does GM own that it can flog or borrow against.

Surely GM can't borrow it's way out of trouble? That seriously can't be a business plan as it will never make enough money to cover the interest repayments unless is borrows more money to cover the debt.

Sorry that's been the West's economic plan for decades hasn't it???

http://en.wikipedia.org/wiki/General_Motors

[Saving For a Space Ship]

We must be getting closer to governments pressing the 'reset' button and ordering mass write-offs of debts including mortgages.