The earnings news isn't great for General Motors (NYSE: GM) this morning, but the company did manage to lose less money than expected. The struggling American automaker announced that it lost $6 billion during the quarter and spent $10.2 billion more cash than it received. Excluding items, GM lost $9.78 per share -- far greater than a year ago when the firm lost 67 cents per share. Despite results being far worse than a year ago, GM managed to top expectations of a loss of $11.39 per share. GM's quarterly revenue dropped 47% to $22.4 billion from $42.4 billion a year ago.
[Update: GM will need another $2.6 billion in U.S. aid in May, CFO Ray Young said on a conference call.]
While a smaller-than-expected loss is nice, a loss is a loss, and a nearly $10-per-share loss is huge. Furthermore, GM continues to stare down the barrel of a June 1 government deadline to either complete restructuring or go into bankruptcy protection.
The picture definitely isn't pretty for GM, but it is possible that the company can come up with an acceptable plan. Although, it seems that the government may have already made up its mind about GM's fate. Nevertheless, the company must shift gears and begin to offer consumers what they want, not what the company wants to make. Unfortunately, this isn't the business model GM has followed in the past, and it sure is hard to teach an old dog new tricks.
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Reader Comments (Page 3 of 3)
5-08-2009 @ 12:16AM
john perry said...
Gettlefinger the president of the UAW is nothing but a pimp. His two star HOs are nancy pelosi and her boy obama. They do what he instructs them to do.
They will keep loaning the auto makers money as long as it is required or BKO, baby killer obama, is run out of office. They owe their pimp for getting them elected and he will never let them forget it.
5-08-2009 @ 1:11AM
Shanna said...
I say no more $ for GM. Let their a$$es go under. I'm not going to have ny taxes raised MORE because they can't handle their finances and keep their heads above water.
5-08-2009 @ 2:37AM
mikemiloserdoff said...
I think the argument for saving jobs is about over, like sgentilejr implied, if no cars are sold due to the circumstances, how will the jobs remain?
The United States is perhaps the first country to experience what happens after a "superpower" in an economic sense loses its current foothold and fades into the sunset of its own economics. I think as Americans, we may be looking at the microscopic issues of the current status of our economy, rather than looking at our economy from a broader perspective. I think a lot of American companies which are not concerned about the American economy as a whole should ethically be concerned about the economic issues that face the country that derive the bulk of their profits, rather than just go off and create cost centers in foreign lands they do not even derive any profits from ("corporate stripmining", taking the wealth out of a body of land, and leaving nothing more than residual waste).
Perhaps we are trying to breathe life into a U.S. economy which is the "here and now", rather than develop and nurture a new U.S. economy which will be the "up and coming", far different from what we know today.
I don't think it is the time to say that party "a" bent over for party "b", but rather to use that energy for future American economic models and issues...
5-08-2009 @ 3:54AM
Wendell said...
Haven't they heard? Give the Unions 55%, and cheat the private stock holders out of their share. That is the wonderful formula they decided to try with Chrysler.
5-08-2009 @ 6:13AM
Andris Taube said...
Katrina victims received formaldehyde laced trailers in a mess which they did not create. GM & the UAW get billions for a mess of their own creation. Why?
5-08-2009 @ 7:17AM
don luby said...
Obammy os as arrogant as a UAW member. No more bailout for GM. Let them go bankrupt and remake themselves. More money would be like giving an alcoholic free booze for a birthday present.
5-08-2009 @ 6:34PM
D said...
Let's see! Non-Union Toyota, lost 7.7 billion!!!!!! So how is GM's loss of 6 billion ALL the UAW's fault? Doesn't Ford have the same contract with it's workers as GM? Get your head out of your a$$, it's the economy to blame. Almost everyone's losing money, especially all the ones that got past bailouts. Retail stores cried all winter about sluggish sales, yet their declines were only 2%. Try having a sales decline of 42%. No one can survive that kind of hit!