GM Reports Preliminary Second Quarter Financial Results, Beats Estimates

[mbukukanyau]

Originally Posted by Perian

Since GM books a sale as soon as a vehicle leaves the factory, revenue was bound to jump.




.

GAAP requires you book a sale when

• Completion of the earnings process
• Assurance of payment

GM has no control over how they book revenue. the SEC /Accounting standards determines that

[Ming]

Originally Posted by Chaz_23

We all know that GMNA is in trouble and will continue to be in trouble for decades until Americans get over their pathological compulsion to buy Toyoduhs.

The important thing is that GM is doing great elsewhere. But here's my worry, while GM is slightly improving quality in the US, how is the quality of their cars elsewhere? I have yet to hear anything good.

Well here's something. The GM Daewoo produced Suzuki Forenza Wagon I own has been solid and trouble free so far, and has been a great deal for the money, IMO.

The Chevrolet Lacetti also has a crazy fan base worldwide from what I've seen across the web.

The image of those "crappy Korean cars" is actually better than the image GM put forth with moldy old Astros, Camaros, Ventures and even Trailblazers that saw Chevrolet's market share stagnant and puny before the arrival of the GMDAT models.

Indian reviews often gush about the great cars like the Aveo - keep in mind they've had cars like the Marutis, etc., and Russians seem to love the Daewoo-Chevies, too, given what they had to drive before.

Frequently updated styling is something GM never paid much attention to in developing markets --- they'd just toss an old S-10 Blazer into the market and hope it would sell -- see the dated design of the old Buick Sail or Chevy C2, for instance, and the Daewoos (with the exception perhaps of the Tacuma), have done much to change that.

Daewoo's Asian "sense" of the importance of frequently updated styling has helped them alot in these markets, and the quality is not something I've ever seen come up as a sore point in reviews in India, China, etc.

[Firebird00]

Its good to see GM turn a profit for once. I don't care how big or how small it is, a gain is a million times better than a loss.

[F@#$IMPORTS]

Originally Posted by Perian

IT'S VERY IMPORTANT TO REMEMBER ONE LITTLE DETAIL HERE BEFORE THE "WAY TO GO GM", "WE KNEW YOU COULD DO IT" POSTING FEAST BEGINS...

If you look at the dealer stock levels of SUVs and Pickup Trucks, it is clearly evident that GM has been over producing vehicles during the first six months of this calendar year. Big deal you say? Read the following from Business Week:


And it's worth noting that GM can make profits upwards of $10,000 on each big truck, vs. next to nothing on some of its sedans.

Since GM books a sale as soon as a vehicle leaves the factory, revenue was bound to jump.


Don't be fooled: June sales (and probably July's also) tell us that GM must begin to consider production cuts in their main money making lines of vehicles.

The profit party may be coming to a quick end.

This surprise profit level is sure to be looked at as an anomaly just a few months from now.


Oh, and by the way; the announcement couldn't have come at a worse time - as far as the UAW contracts go.

.

Thanks for that, I was to comfortable in my "doom and gloom" mode.
And don't forget to PANIC! PANIC! AND MORE PANIC!

[VibenPontiac]

Originally Posted by KUZCO

almost a billion in profit BUT they want us to give up benefits very interesting, maybe they shouldve lied about their profits

Maybe you should learn about Profit Margin. $891 million is 1.9% profits on 45.9 billion in revenues - hardly enough to reinvest into the business and perform strongly in the future. Its good news but only in that it demonstrates GM is on the right track at least. Even if you believe GM doesn't need 10% margins like Toyota gets they need better than 1.9%.

GM shouldn't ask for everything and the kitchen sink from the UAW but they do need labor/healthcare/benefits costs to be more in line with the market, and with the current agreement those costs are higher than market rates. There is a position that considers the needs of both sides - yes I know that is completely contrary to the current environment where everyone sees things as black or white

[goatgary]

[quote=VibenPontiac]Maybe you should learn about Profit Margin. $891 million is 1.9% profits on 45.9 billion in revenues - hardly enough to reinvest into the business and perform strongly in the future. Its good news but only in that it demonstrates GM is on the right track at least. Even if you believe GM doesn't need 10% margins like Toyota gets they need better than 1.9%.

Good post! Interesting that the UAW thinks that relatively slim margin should go to MORE BENEFITS instead of to better product and/or marketing which could bring stronger margins in the future. But of course with the UAW it has ALWAYS been about NOW. They really believe GM stands for
"Gimmie More".

[mstng1966302]

Originally Posted by KUZCO

almost a billion in profit BUT they want us to give up benefits very interesting, maybe they shouldve lied about their profits

I know someone who works in their financial department, they are still preparing for the worst believe me. Like making sure they can pay off the bank in case they go under.

It is nice to see GM improving, although disappointing that they made the least revenue in their own country, but hopefully that will change soon. It looks like GM is starting to get back on the right track, but its still a long way till they dig themselves out of this hole.

[emh]

Originally Posted by KUZCO

almost a billion in profit BUT they want us to give up benefits very interesting, maybe they shouldve lied about their profits

GM lost money in the US, so yes, they need to cut costs in the US. I'd rather see you guys give up benefits and keep your jobs than see GM move production to some other country in order to stay in business.

I'm in the camp that thinks the profit shows GM is moving in the right direction.

Some very good points about the global picture in Ming's and Chaz_23's posts above. I've also wondered about the quality of Chevys sold in Europe and Asia (not that I have any data to think it's bad -- just curious). It's probably not much of a problem in the very-cost-sensitive markets like India, China, and eastern Europe yet, but it is something GM needs to keep an eye on, and stay competitive with Toyota.

[eaton53]

Originally Posted by Chaz_23

The important thing is that GM is doing great elsewhere. But here's my worry, while GM is slightly improving quality in the US, how is the quality of their cars elsewhere? I have yet to hear anything good. If they are producing crappy cars elsewhere or shipping deffective parts to other markets -see article yesterday from quality control guy- then they're setting themselves up for Toyota repeating their US stunt all over the world. GM sells crappy cars like crazy-> Toyota starts selling excellent cars-> people take notice-> people get tired of low quality cars-> people buy Toyoduhs in droves.

GM doesn't compete with one arm tied behind its back in other countries.

[Havasavana]

Originally Posted by Ming

The Chevrolet Lacetti also has a crazy fan base worldwide from what I've seen across the web.

The image of those "crappy Korean cars" is actually better than the image GM put forth with moldy old Astros, Camaros, Ventures and even Trailblazers that saw Chevrolet's market share stagnant and puny before the arrival of the GMDAT models.

Indian reviews often gush about the great cars like the Aveo - keep in mind they've had cars like the Marutis, etc., and Russians seem to love the Daewoo-Chevies, too, given what they had to drive before.

Frequently updated styling is something GM never paid much attention to in developing markets --- they'd just toss an old S-10 Blazer into the market and hope it would sell -- see the dated design of the old Buick Sail or Chevy C2, for instance, and the Daewoos (with the exception perhaps of the Tacuma), have done much to change that.

Daewoo's Asian "sense" of the importance of frequently updated styling has helped them alot in these markets, and the quality is not something I've ever seen come up as a sore point in reviews in India, China, etc.

How much penetration does Toyota have in the markets where GM is doing well? I have no personal knowledge of the quality of GM's products beyond this country, but often read here that Opel products, for example, are superior to what GM offers here. If that's true, maybe these products will compete well with what Toyota offers, now or in the future. But, at some point, it'll be GM offerings against Toyota and Honda offerings in these countries, and pickups and large SUVs won't be a factor. So why should we expect the result there to be any different than what the result here has been? The Cobalt and Aveo don't stack up well against the competition. \

Given that GM makes money on trucks and large SUVs and loses money on cars, why does it not make sense for GM to exit the car business with exceptions like the Corvette? It would kill the dealers, but at some point, what choice will there be? Either the car business has to contribute or be jettisoned.

[Ming]

Originally Posted by Havasavana

But, at some point, it'll be GM offerings against Toyota and Honda offerings in these countries, and pickups and large SUVs won't be a factor. So why should we expect the result there to be any different than what the result here has been? The Cobalt and Aveo don't stack up well against the competition. \

Given that GM makes money on trucks and large SUVs and loses money on cars, why does it not make sense for GM to exit the car business with exceptions like the Corvette? It would kill the dealers, but at some point, what choice will there be? Either the car business has to contribute or be jettisoned.

Well, consider that what Daewoo is succeeding with now is product mostly developed by a scrappy Korean automaker pre-GM ownership that had to borrow engines from other automakers, etc., and work with a relatively short history of producing automobiles.

Now they have GM infusing billions into their R&D, something that can put them on par with Hyundai if they are given a free rein without the heavy handed beancounters of Detroit messing with their small car designs.

I think you are right, but only partially. GM's small car and even car business is doomed with the way that they have traditionally ignored it in favor of trucks and SUVs, and now large crossovers.

But consider that Toyota imports fully half of its lineup. Why should GM not simply import the cars it makes overseas for most of its US lineup while it keeps building its profitable trucks and large crossovers (the only vehicles it really cares much about) here? If Toyota can profit from a $15,000 imported Scion as well as a Lexus, then why can't GM import $15,000 much improved Daewoos, as well as pricier cars like the Chinese Park Avenue as-is, imported directly from China where it is assembled?

The only answer as to "why not" is the UAW or "NIH" mentality.

I fear that Opel designs will only make it here via Mexico, etc., as the Euro's rise makes it difficult to turn a profit or sell them at a reasonable price. And I worry that the Astra will not be as good of a value as long as it comes from Europe (unless GM eats the cost of the Euro difference).

If the UAW stands in the way of that, then all GM really can hope to do is what you suggest, and perhaps a few specialty cars like the Volt and Corvette.

If that day comes, I will write off GM, because I am not a Truck, SUV and (at least the concept car's "mini-camaro" style) Volt kind of guy.

I will just keep going to Suzuki for the kind of cars that GM refuses to import and sell here under its own brands.

[likearock00]

Can't get to page 3 for some reason....

Anyway, I think this is much better than any loss. GM will pull through this with the new products. Hopefully they will start pricing their sedans at a more profitable level. It won't work with the current product, but as a new model comes in, raise it up!

[unkillsam]

Originally Posted by KUZCO

almost a billion in profit BUT they want us to give up benefits very interesting, maybe they shouldve lied about their profits

GM made that "billion" dollars outside the US. You want GM Europe, GMDAT, Holden, and all the other global subsidiaries to subsidise your paycheck? Guess what, you would be the first one bitching if you could not get a raise because the rest of GM was tanking and GMNA was the good division.

So pathetic, people that feel they deserve something for nothing.

[joemac]

Originally Posted by Perian

As of 07-01-07 GM had 321,300** T900s* in stock, a 142** day supply based on the dismal selling rate in June. Last week 20,310** T900s were produced. Unless the 0%/60 incentive that was announced yesterday has a large effect, the inventory number will probably rise, even with the just concluded two week vacation period.

My point is, sooner or later, GM must slow T900 production and that will have a marked effect on profit performance.

*T900 = Silverado/Sierra line of pickup trucks.
**Source: Automotive News Data Center.

So what happens to that GMT-900 142 day stock if the UAW negotiations don't go as planned? GM knows right now what considerations they are going to ask of the UAW during the negotiations. Might they prepare dealer stock in leiu of? Would we all call them dumb and stupid if they didn't prepare and incur a 30/60/90 day strike with no forethought on amp'ing up inventory? Certainly would. Might they not be as dumb as we make them out to be? Maybe, maybe not.

[motorman]

just proves that selling less cars can make you more money. being #1 in production is not always the answer