GM posts $15.5 billion 2nd-quarter loss

[guitarlix]

Originally Posted by montrealvue

Painful, but not surprising.

...time for GM to start begging Washington for cash...

NO.

That would just drain taxpayers money and bring us back to square one in 2 years.

GM continues to suffer because it has yet to address some of the root causes for its problems. I predicted this 2 years ago when I said that GM's multi-brand model was unsustainable in the NA market.

But everyone said - a sale is a sale so who cares if we sell a Buick or a Pontiac or a Chevy. What is happening here is that brands like Toyota and Honda are getting stronger over time by reinforcing their core brand image with focused advertising and marketing.

On the other, GM is stuck dividing its ad budget VERY inefficiently between a bunch of weak brands. And for a company in its position with public perception totally stacked against it, this is the worst thing you could do.

As long as GM continues forward having redundant brands like Saturn and GMC, it is going to suffer. We're not just fighting with product here....we're also fighting with brand images. And that's where GM suffers like crazy.

Unfortunately, Rick is the main push behind holding on to all 8 brands and that is why he is absolutely the wrong person for the job. If the guy running the company hasn't recognized some of the main issues affecting the company, what hope does the company have?

[Hurricane]

Originally Posted by wescoent

I wonder if the UAW VEBA would be interested in buying GM...

LOL!

[zete]

Originally Posted by Psionic Wibbly

Holy moly!

are these real losses or "paper losses"

TTAC is gonna be jumping up and down with excitement!

The charges that are cash based are bad. The drop in residual value for GM's trucks and SUVs is bad. Some of the other stuff is immaterial.

The question is, the cliff that we saw trucks and SUVs fall off of, did the prices hit bottom or are they still falling? If it's bottom, then this is the end of the write downs. If prices keep dropping, ay-yi-yi.

[K-1]

Originally Posted by Ambalanche

WOW!! Unbelieveable! Are there going to be "one time charges" every quarter? That's really all I can say!

With how volatile the market is right now, probably for the foreseeable future.

[zete]

Originally Posted by guitarlix

NO.

That would just drain taxpayers money and bring us back to square one in 2 years.

GM continues to suffer because it has yet to address some of the root causes for its problems. I predicted this 2 years ago when I said that GM's multi-brand model was unsustainable in the NA market.

But everyone said - a sale is a sale so who cares if we sell a Buick or a Pontiac or a Chevy. What is happening here is that brands like Toyota and Honda are getting stronger over time by reinforcing their core brand image with focused advertising and marketing.

On the other, GM is stuck dividing its ad budget VERY inefficiently between a bunch of weak brands. And for a company in its position with public perception totally stacked against it, this is the worst thing you could do.

As long as GM continues forward having redundant brands like Saturn and GMC, it is going to suffer. We're not just fighting with product here....we're also fighting with brand images. And that's where GM suffers like crazy.

Unfortunately, Rick is the main push behind holding on to all 8 brands and that is why he is absolutely the wrong person for the job. If the guy running the company hasn't recognized some of the main issues affecting the company, what hope does the company have?

The brands can survive, just not as full line as GM has kept them from the late 60s onwards. They need to make most niche brands. They only need two full line brands: Chevrolet and Cadillac. Buick needs 3 or 4 models, matched to China exactly. Pontiac needs a few RWD cars matched to GM's world portfolio. Saturn should just be Opel's FWD cars for those that want a European car at a reasonable price. Saab should remain a quirky niche. GMC should just be the high end badge for a Chevrolet truck.

Thus, in the case of Pontiac, they'd have but two cars at the moment: G8 and Solstice.

To save the dealers, I'd make them all General Motors dealers having the complete line except Cadillac. Cadillac would have separate dealers -- or at least separate showrooms. In fact, I'd put Buick and Cadillac together -- both as luxury marques. That would merge Chevrolet, Pontiac, GMC, and Saturn. Ensure there is no overlap, and get on with it.

Come to think of it, throw Saab in with Cadillac and Buick. Three different types of luxury: Global, American, and European. Let the customer choose.

[EldoFan]

Originally Posted by zete

The brands can survive, just not as full line as GM has kept them from the late 60s onwards. They need to make most niche brands. They only need two full line brands: Chevrolet and Cadillac. Buick needs 3 or 4 models, matched to China exactly. Pontiac needs a few RWD cars matched to GM's world portfolio. Saturn should just be Opel's FWD cars for those that want a European car at a reasonable price. Saab should remain a quirky niche. GMC should just be the high end badge for a Chevrolet truck.

Thus, in the case of Pontiac, they'd have but two cars at the moment: G8 and Solstice.

To save the dealers, I'd make them all General Motors dealers having the complete line except Cadillac. Cadillac would have separate dealers -- or at least separate showrooms. In fact, I'd put Buick and Cadillac together -- both as luxury marques. That would merge Chevrolet, Pontiac, GMC, and Saturn. Ensure there is no overlap, and get on with it.

Come to think of it, throw Saab in with Cadillac and Buick. Three different types of luxury: Global, American, and European. Let the customer choose.

Finally, an idea that makes sense!

[Hurricane]

Originally Posted by zete

The brands can survive, just not as full line as GM has kept them from the late 60s onwards. They need to make most niche brands. They only need two full line brands: Chevrolet and Cadillac. Buick needs 3 or 4 models, matched to China exactly. Pontiac needs a few RWD cars matched to GM's world portfolio. Saturn should just be Opel's FWD cars for those that want a European car at a reasonable price. Saab should remain a quirky niche. GMC should just be the high end badge for a Chevrolet truck.

Thus, in the case of Pontiac, they'd have but two cars at the moment: G8 and Solstice.

To save the dealers, I'd make them all General Motors dealers having the complete line except Cadillac. Cadillac would have separate dealers -- or at least separate showrooms. In fact, I'd put Buick and Cadillac together -- both as luxury marques. That would merge Chevrolet, Pontiac, GMC, and Saturn. Ensure there is no overlap, and get on with it.

Come to think of it, throw Saab in with Cadillac and Buick. Three different types of luxury: Global, American, and European. Let the customer choose.

This does make a lot of sense...

[zeobandit]

Wow...... GM isn't going to be around much longer if this keeps up.

[tgagneguam]

Originally Posted by throwback

When will Rick & Co. realize their latest plan is not working? The stock price will go down again, and it wont surprise me if the large investors start the push to change the top management. No company can keep losing money like this and stay in business.

Denial is a powerful defense mechanism that apparently is in overdrive for lots of people both inside and outside of the Corporation. Really, there is no good light in which this news should be placed.

Originally Posted by likearock00

Ouch. I hate to say it, but today is going to be a great day to buy stock!

Good lord, no it isn't. Why do people say that?

Originally Posted by montrealvue

Painful, but not surprising.

...time for GM to start begging Washington for cash...

I'll pass, thank you very much. I soon will have to start paying other people's mortgages that they shouldn't have, I'm in the unfortunate pool who has to back JPMorgan Chase's ridiculously cheap buyout of the formerly poorly managed Bear Stearns, so I will definitely pass on "saving" GM. They don't deserve a tax payer bailout.

Originally Posted by wescoent

The truly frightening thing about this is that this loss is AFTER GM has reduced its exposure to GMAC by over 50%.

My general opinion is that this quarter was as bad as it was because everyone is in a mass panic about housing and gas prices. Lots of home equity has been wiped out, and high gas prices are pinching people's day to day wealth, so people are increasingly likely to trade in their SUV on a low-profit small car, or simply keep driving their trusty current vehicle than splurge on something new and cool....

wescoent, even though you sit on Wall Street, I know from your posts that you're smart enough to know that GM's second quarter was horrible primarily because it is poorly managed. The economy simply accentuates continued poor decisions on GM's management's part.

[silvergoat2k6]

When are the stockholders going to finally say "we've had enough", and finally push for changes to be made?

In less than a week's time we went from a prediction of a $1.5 Billion loss to the reality of a $15.5 Billion loss.

Ouch.

[wescoent]

Originally Posted by tgagneguam

1) I'll pass, thank you very much. I soon will have to start paying other people's mortgages that they shouldn't have, I'm in the unfortunate pool who has to back JPMorgan Chase's ridiculously cheap buyout of the formerly poorly managed Bear Stearns, so I will definitely pass on "saving" GM. They don't deserve a tax payer bailout.

2) wescoent, even though you sit on Wall Street, I know from your posts that you're smart enough to know that GM's second quarter was horrible primarily because it is poorly managed. The economy simply accentuates continued poor decisions on GM's management's part.

1) It was more like the acquisition of Bear Stearns' shiny new tower in Midtown... that was pretty much the only thing of value in that company, aside from the prime brokerage.

2) GM being poorly managed is a given at this point. We've known GM has been poorly managed since the late 1970's, and it's just kind of accepted. I did indeed mean that the economic situation just magnified it worse than usual.

[guitarlix]

Originally Posted by zete

The brands can survive, just not as full line as GM has kept them from the late 60s onwards. They need to make most niche brands. They only need two full line brands: Chevrolet and Cadillac. Buick needs 3 or 4 models, matched to China exactly. Pontiac needs a few RWD cars matched to GM's world portfolio. Saturn should just be Opel's FWD cars for those that want a European car at a reasonable price. Saab should remain a quirky niche. GMC should just be the high end badge for a Chevrolet truck.

Thus, in the case of Pontiac, they'd have but two cars at the moment: G8 and Solstice.

To save the dealers, I'd make them all General Motors dealers having the complete line except Cadillac. Cadillac would have separate dealers -- or at least separate showrooms. In fact, I'd put Buick and Cadillac together -- both as luxury marques. That would merge Chevrolet, Pontiac, GMC, and Saturn. Ensure there is no overlap, and get on with it.

Come to think of it, throw Saab in with Cadillac and Buick. Three different types of luxury: Global, American, and European. Let the customer choose.

Absolutely not. That is sure shot disaster right there. This is the very thing I've been fighting against as far back as I can remember. People on this site keep juggling cars and brands back and forth trying to somehow fit the brands to the market versus letting the market dictate the brands.

Brand channels are also absolutely retarded because they do NOTHING for the brand. You're just trying to rearrange the problem versus finding a solution.

You're not just selling cars here........people need to know what the brand stands for. You could give Lexus products to Suzuki and they'd have a hard time selling them simply because of the badge at the back that says Suzuki.

If you're going to keep 8 brands, each selling 3 products JUST so that the products don't overlap, you might as well kiss the market good next week.

The way to do this is not to struggle internally to make sure that your products don't overlap.

The correct way is to identity current and emerging market segments (eg. compact car, premium midsize, midsize SUV etc.) and then simply field the absolute best product that you have and support it with the best advertising possible. "3 different kinds of luxury"....are you kidding me?!? Lexus is the largest luxury brand in American and its doing it with Japanese luxury which isn't even on your list. No, there's only one luxury here - CLASS LEADING LUXURY. If you can't do that, forget it.

In my mind, there is absolutely NO SPACE FOR SATURN OR GMC in the NA market. If the market rebounds, GMC will sell again but the amount of $ to make Saturn work in NA basically = pointless effort.

And then you're still left with Pontiac, Buick, Saab, Hummer.............makes me want to bang my head.

Let me put it this way - right now, perception is stacked up totally against American companies. And as far as sales go, PERCEPTION IS REALITY. Without class leading products and design (very important) and first rate, focused advertising, GM, Ford and Chrysler WILL continue to bleed marketshare because there are stronger brands on the market right now. And as far as GM is concerned, there is no way to achieve that with 8 brands in one market.

[fp115]

Originally Posted by zete

The charges that are cash based are bad. The drop in residual value for GM's trucks and SUVs is bad. Some of the other stuff is immaterial.

The question is, the cliff that we saw trucks and SUVs fall off of, did the prices hit bottom or are they still falling? If it's bottom, then this is the end of the write downs. If prices keep dropping, ay-yi-yi.

1.46 million of the losses related to cash. Rick emphasized on it SEVERAL times but as we already all knew, the media would twist it around.

[psece]

WOW. I was so far off that the losses from just SUV Leases was worst than what I was expecting. I, this is really hard. I, come on, I got to say it. I think I agree with Buickman! Ahh... I feel better now.

Bye Rick, don't let the door hit ya on the way out. I still think they should keep Lutz though, just push him to the back of the line as far as access to the press goes.

I vote for John Heinricy as the new CEO and Frederick A. Henderson as Chairman.

[Quickening]

Ouch. Wagoner and UAW needs to go.