GM reports net loss of $2.5 billion

[Fridge Magnet Rabbit]

Ford Motor Company's third-quarter earnings report released earlier today basically said, "Times are bad, but we'll be aight." General Motors' just-released earnings report for the same time period says "Holy effin' hell, we're running out of things to cut, please help us!" We'll try and it keep it simple, but the main number is $2.5 billion, as in $2.5 billion lost during the Q3 '08. That compares with a $42.5 billion loss this time last year, but the bulk of that was attributable to a one-time charge against the books. Unfortunately, not only was GM North America revenue down, but the automaker claims the credit crisis has made its way around the world and contributed to losses in GM Europe and GM Asia Pacific, as well as its own financing arm, GMAC.

 

Here's the bigger story: General Motors burned through $6.9 billion of its cash reserves during Q3 '08, which reduces its bank account from $21 billion at the end of Q2 to $16.2 billion today. That's barely enough for such a big automaker to survive the coming winter, so In response, GM has announced to create an additional $5 billion of liquidity by the end of 2009. Below are the big changes we can expect.

 

 

• Retiming select vehicle programs in North America and Europe by three to 12 months, i.e. lengthening product lifecycles
  
• Deferring capacity expansion projects
  
• Lower sales promotion spending, i.e. less advertising
  
• Less support of dealer network activities and channel consolidations
  
• Scaling back production
  
• Curtailing discretionary spending (travel, consulting, over-time, etc.)
  
• Increase reduction in force from 20 to 30%
  

Three other things deserve mention. The first is that rumors of the Volt being delayed are untrue. In fact, GM says that spending on the Volt and other fuel economy initiatives will be increased. The second is that GM acknowledged it was considering acquiring Chrysler LLC (though it wasn't named directly), but the merger talks have stopped for the time being. And finally, the main message GM wants to get out via its earnings report is that despite cutting spending even more, it considers government aid essential for its survival. So, ball in your court, Obama.

 

Follow the jump for a pair of lengthy press releases from GM.

 

[source: General Motors]

 

PRESS RELEASES

 

Original Source

http://www.autoblog.com/2008/11/07/gm-reports-net-loss-of-2-5-billion-more-cuts-and-asks-for-help/

[KoenigseggBG]

Yay! :woot:

[Nige]

It was gonna happen ... no one is safe from the current economical crisis especially GM has they were already loosing dollar anyway .....

 

 

I tell you what GM need to do, they need to give Saab some TLC even I know has a Saab fan they can't compete with BMW or Mercedes at the moment. Basically if GM gave saab some tlc they would in turn create GM a nice hefty profit afterall which brand under GM is the only truly global brand ????

 

Yep ... Saab, yet GM really hasn't done a great deal to help Saab in terms of expanding the model line up to keep it up there with the big boys.

 

new Saabs + sales = profit for GM, everyones happy :thumbsup:.

[Nodz86]

Nige saab is in compitition with Volvo, they have been out the4 Audi, Merc BMW, Jag battle for ages now, if they were even in it at all

[gingervette]

very true

 

And Jeremy Clarkson is in love with the new ZR1 and the new CTS-V, that should turn things around since after all, he is the universal opinion lol

 

 

But GM is oging to come out of it. I know they will. They are doing bad now because of bad decisions they have made in the past. Almost every single car they have has been re-designed in the last 3-4 years and the market has not got an opportunity to react properly to them. The new Malibu gets better mileage than the CAMRY! they are doing good

[Nige]

Barrack Obama to the rescue :thumbsup:.

[gingervette]

yea like he's gonna do anything...I want to move countries now lol

[t.]

Meh, the US government will continue to subsidise GM for as long as they possibly can. I think even with decent cars the hill is simply too steep for them to climb.

[gingervette]

It's looking that way...that problem is people, people that are too hard-headed and won't admit that GM has good cars now and thinks something is going to go wrong.