General Motors expects to post a massive 2nd quarter loss on Friday

[Psionic Wibbly]

GM investors gird for another big loss

By Shawn Langlois, MarketWatch

Last update: 2:35 p.m. EDT July 30, 2008

SAN FRANCISCO (MarketWatch) -- General Motors Corp. will show just how bad the state of its business has become on Friday when the struggling Detroit giant hands in what many on Wall Street expect to be a massive second-quarter loss.

On average, analysts polled by FactSet Research are looking for a loss of $2.85 a share with total revenue of $42.6 billion. For the year, Wall Street is expecting to see a whopping loss of $5.86 a share, with no annual profit projected until 2010.

If Ford Motor Co.'s second-quarter report from last week is any indication, "lousy" could be an understatement.

http://www.marketwatch.com/news/stor...A%7D&dist=hpts

[Quickening]

Yay and a week of doom and gloom to follow. I can't wait, wheres my popcorn.

[Clownzilla]

Might as well put it all in caps. Don't buy GM ever again because of this MASSIVE LOSSSSSSSS! Sell your stock in GM because of this MASSIVE LOSSSSSSSSS! Buy Toyota because GM is going under with this MASSIVE LOSSSSS!!!!!!! Thanks for telling us the truth on the matter all mighty media.

[New_Mexico_Sunset_on_Rt66]

last paragraph on making money on small cars, "Once labor savings really start kicking in over the next few years, I think GM can pull it off, but the question is whether it can survive long enough to get there."".

[RCDonner]

How could this be ? Will they ever make money with auto business ? Did they ever make money with auto business or have the non auto divisions from the past (GMAC, EDS, Hughes etc.) been the moneymakers ? Now these divisions are sold and only the auto division is left. I don´t know where this will end.

[likearock00]

I missed buying some stock when it tanked a month or 2 ago. I won't miss this opportunity though!!

[mgescuro]

Originally Posted by RCDonner

How could this be ? Will they ever make money with auto business ? Did they ever make money with auto business or have the non auto divisions from the past (GMAC, EDS, Hughes etc.) been the moneymakers ? Now these divisions are sold and only the auto division is left. I don´t know where this will end.

I've often wondered that as well.
GM, by selling off other businesses, made itself more susceptible to the cyclical nature of the auto industry. And lets face it, there really hasn't been any strength in teh auto industry for some time. It's been flat.

THe problem with GM, it's sole source of cash flow is the auto business, which isn't doing well because of capital costs, overhead, labor, whatever. Their solution is to cut those costs while attempting to improve product and sales, and going for more higher margin sales, as in the retail space (not fleet).

The result has been mixed.
GM made a bet that full sized trucks and SUVs were needed to support the company, primarily because that's where they get their money.

Now, that cash cow is a downer cow. Where does GM go? They haven't solved their decades long problem of producing small cars in the US profitably. Their cars still significantly overlap. They have too many brands. Their growth markets are international, while they allow North America to flounder.

What else can one expect but losses?

[vcs2600]

Originally Posted by RCDonner

How could this be ? Will they ever make money with auto business ? Did they ever make money with auto business or have the non auto divisions from the past (GMAC, EDS, Hughes etc.) been the moneymakers ? Now these divisions are sold and only the auto division is left. I don´t know where this will end.

The overseas auto business is generally profitable or at least break even.

As for North America -- I don't know when the last time that was even close to being profitable. Early 1990s, I think. NA has been a long-standing structural problem which GM managemnet has been unable to fix.

Also by spinning of those businesses, investors can continue to profit from them without being sunk down by the GM auto deadweight.

[psece]

I like how everyone accepts Analysts statements as facts. Anyone ever wonder who pays Analysts their paycheck?

[mbukukanyau]

Originally Posted by mgescuro

I've often wondered that as well.
GM, by selling off other businesses, made itself more susceptible to the cyclical nature of the auto industry. And lets face it, there really hasn't been any strength in teh auto industry for some time. It's been flat.

THe problem with GM, it's sole source of cash flow is the auto business, which isn't doing well because of capital costs, overhead, labor, whatever. Their solution is to cut those costs while attempting to improve product and sales, and going for more higher margin sales, as in the retail space (not fleet).

The result has been mixed.
GM made a bet that full sized trucks and SUVs were needed to support the company, primarily because that's where they get their money.

Now, that cash cow is a downer cow. Where does GM go? They haven't solved their decades long problem of producing small cars in the US profitably. Their cars still significantly overlap. They have too many brands. Their growth markets are international, while they allow North America to flounder.

What else can one expect but losses?

Mge, I have to agree with you with one exception..
Too many brands.
I think GM needs as many brands as global as possible, not cutting them, GM is too dependent on North America.

A G6 for example sold all over the world just might create enough volume to replace Revenue due to the North American downturn.

Basic business, GM is too concentrated on one market. They need to take their brands Global, and address small cars.
By Global I mean, a global sales network for all brands and product lines. Not necessarily manufacturing. A car in India and Africa does not even need AC standard. It can be an option.

I could tell you here that GM could probably move at least 100,000 tahoes in Africa a year with a diesel option, and lower content plus a better basic AWD system, (old school transfer case) add a few more in Asia, a few in South America Australia, and soon you are replacing north america sales loss, from your texas factory.

But noooooo, GM north America folks do not see the world that way. They see Europe, Opel, (japan does not exist) North America, and South America is Brazil.
Look at Toyota, Rav 4-global, 4 Runner-Global, Corolla-Global, Camry-Semi Global, etc.. Nissan, same, Mercedes, Same, why only Detroit companies behave as if Indians or Arabs, or Koreans would not drive a pontiac?

There is lots of African dealership networks, like, DT. Dobie, Rohnro, etc that could use more products..

How about a basic G6, 4 Banger, manual windows, Diesel, etc?

[Ambalanche]

Well, hopefully the new, truly improved product will help, but even the improved product cannot do it by itself. GM has to train their dealership staff, yes, I know they are independent, how to treat the customer. Or better yet, how NOT to treat the customer. Customer's are now more educated than ever and know what vehicles cost, and many unfortunately know more than the salespeople about the car or truck they are considering buying and it's competitors, but not just that, after the sale, most GM dealerships I've dealt with, and they have been many, their service just sucks. They don't care if you come back to buy another car, it's just assummed you'll be back just like in the good ole days when GM had 45% market share. If they don't change anything, how can they expect anything else (meaning profits) to change? It won't, it can't.

[2000GTPBROTHER]

Friday shouldn't be too much of a surprise, remember what GM said earlier in the month.

"Actions outlined today comprehend the anticipated impact of second quarter results, which the company plans to announce in the near future. GM anticipates it will report a significant second quarter loss, driven in part by the previously disclosed negative impact of the American Axle and local union strikes in North America, as well as the continued weakness in the U.S. auto market and adverse vehicle segment mix.

In addition, the company expects to record significant charges or expenses related to its previously announced hourly attrition program in the U.S., the recently announced North American truck capacity actions, valuation of GMAC stock, lease assets, Delphi recoveries, the American Axle settlement, the Canadian labor contract, and others."

Significant twice = Massive?

[windvale]

How the hell is the Rick surviving all this ? This guy makes the freakin Terminator look like my grandmother...

[Buickman]

Here is a History Lesson ......

The US standard railroad gauge (distance between the rails) is 4 feet, 8.5
inches. That's an exceedingly odd number. Why was that gauge used? Because that's the way they built them in England, and English expatriates built the US railroads.

Why did the English build them like that? Because the first rail lines were
built by the same people who built the pre-railroad tramways, and that's the
gauge they used.

Why did 'they' use that gauge then? Because the people who built the
tramways used the same jigs and tools that they used for building wagons,
which used that wheel spacing.

Why did the wagons have that particular odd wheel spacing? Well, if they
tried to use any other spacing, the wagon wheels would break on some of the old, long distance roads in England , because that's the spacing of the
wheel ruts.

So who built those old rutted roads? Imperial Rome built the first long
distance roads in Europe (and England) for their legions. The roads have
been used ever since.

And the ruts in the roads? Roman war chariots formed the initial ruts, which
everyone else had to match for fear of destroying their wagon wheels. Since
the chariots were made for Imperial Rome, they were all alike in the matter
of wheel spacing. Therefore the United States standard railroad gauge of 4
feet, 8.5 inches is derived from the original specifications for an Imperial
Roman war chariot. Bureaucracies live forever.

So the next time you are handed a Specification/ Procedure/ Process and
wonder 'What horse's ass came up with it?' you may be exactly right.

Imperial Roman army chariots were made just wide enough to accommodate the rear ends of two war horses. (Two horses' asses.) Now, the twist to the
story:

When you see a Space Shuttle sitting on its launch pad, there are two big
booster rockets attached to the sides of the main fuel tank. These are solid
rocket boosters, or Serbs. The Serbs are made by Thiokol at their factory in
Utah . The engineers who designed the Serbs would have preferred to make
them a bit fatter, but the Serbs had to be shipped by train from the factory
to the launch site. The railroad line from the factory happens to run
through a tunnel in the mountains, and the Serbs had to fit through that
tunnel. The tunnel is slightly wider than the railroad track, and the
railroad track, as you now know, is about as wide as two horses' behinds.

So, a major Space Shuttle design feature of what is arguably the world's
most advanced transportation system was determined over two thousand years ago by the width of a horse's ass.

And you thought being a horse's ass wasn't important? Ancient horse's asses
control almost everything....and CURRENT Horses Asses are controlling
everything else!!

[wescoent]

Originally Posted by Buickman

Here is a History Lesson ......

The US standard railroad gauge (distance between the rails) is 4 feet, 8.5
inches. That's an exceedingly odd number. Why was that gauge used? Because that's the way they built them in England, and English expatriates built the US railroads.

Why did the English build them like that? Because the first rail lines were
built by the same people who built the pre-railroad tramways, and that's the
gauge they used.

Why did 'they' use that gauge then? Because the people who built the
tramways used the same jigs and tools that they used for building wagons,
which used that wheel spacing.

Why did the wagons have that particular odd wheel spacing? Well, if they
tried to use any other spacing, the wagon wheels would break on some of the old, long distance roads in England , because that's the spacing of the
wheel ruts.

So who built those old rutted roads? Imperial Rome built the first long
distance roads in Europe (and England) for their legions. The roads have
been used ever since.

And the ruts in the roads? Roman war chariots formed the initial ruts, which
everyone else had to match for fear of destroying their wagon wheels. Since
the chariots were made for Imperial Rome, they were all alike in the matter
of wheel spacing. Therefore the United States standard railroad gauge of 4
feet, 8.5 inches is derived from the original specifications for an Imperial
Roman war chariot. Bureaucracies live forever.

So the next time you are handed a Specification/ Procedure/ Process and
wonder 'What horse's ass came up with it?' you may be exactly right.

Imperial Roman army chariots were made just wide enough to accommodate the rear ends of two war horses. (Two horses' asses.) Now, the twist to the
story:

When you see a Space Shuttle sitting on its launch pad, there are two big
booster rockets attached to the sides of the main fuel tank. These are solid
rocket boosters, or Serbs. The Serbs are made by Thiokol at their factory in
Utah . The engineers who designed the Serbs would have preferred to make
them a bit fatter, but the Serbs had to be shipped by train from the factory
to the launch site. The railroad line from the factory happens to run
through a tunnel in the mountains, and the Serbs had to fit through that
tunnel. The tunnel is slightly wider than the railroad track, and the
railroad track, as you now know, is about as wide as two horses' behinds.

So, a major Space Shuttle design feature of what is arguably the world's
most advanced transportation system was determined over two thousand years ago by the width of a horse's ass.

And you thought being a horse's ass wasn't important? Ancient horse's asses
control almost everything....and CURRENT Horses Asses are controlling
everything else!!

That's very interesting... I have a new story to tell at cocktail parties.

Speaking of analysts... a week ago, the kids predicted a week ago that Ford would lose around 500 million dollars for Q2... they lost over 8 billion in practice.

Now apply the same to GM...