GM Posts 3rd Worst Quarterly Results Ever

[Croc]

The flawed logic unfortunately comes from beliefs such as "GM makes a $15 billion loss, they're out of money." My logic comes from the fact that I've seen GM make piss-poor management decisions when it comes to the products it delivers. That's why it (currently) doesn't hold a candle to the Japanese marques - a sad, but very real, fact. And what behaviour results on here? Blaming the Japanese for running rings around GM - now that's poor logic skills by anyone's standard.

Yet again your reading comprehension is virtually non-existant. I've never asserted the above. Never. And I've never blamed the Japanese for GM's poor management decisions. Never.

Pompous fool.

[Guest aatbloke]

Yet again your reading comprehension is virtually non-existant. I've never asserted the above. Never. And I've never blamed the Japanese for GM's poor management decisions. Never.

Pompous fool.

Are you always so self-obsessed that you think I'm merely referring to you? I'm referring to general sentiment by a number of GM hardliners on these boards. My point is simple and I'll reiterate: never judge the bottom line until you've assessed any and all unusual items disclosed in the accounts and indeed, any additional reserved contingent liabilities.

I'm not going to get into the petulant habit of reciprocating name-calling online, although I dare say I'd have a few choice words for you face-to-face.

[Satty]

Please you two, we all know that Toyota paid the media to announce that GM lost billions.

[Croc]

Are you always so self-obsessed that you think I'm merely referring to you?

What do you think it means when you use the quote feature?

I'm not going to get into the petulant habit of reciprocating name-calling online, although I dare say I'd have a few choice words for you face-to-face.

I dare say I'd be laughing face-to-face. Seriously...if you relented on your constant "I/me/my ___ is better than you/your/yours" line of posting on this site, you'd be taken a lot more seriously. When you argue with someone for no reason other than you think you are better than them, without even addressing the points of their hypothesis, you won't be taken seriously.

I can't take you seriously. As it is, you are the most one-note poster on this site, responding to anyone who disagrees with you with an irrelevant and semi-incoherent rant about petulant teenagers who hate the Japanese and blame them for all of GM's problems. Which generally isn't even the case on this site.

[Guest aatbloke]

I can't take you seriously. As it is, you are the most one-note poster on this site, responding to anyone who disagrees with you with an irrelevant and semi-incoherent rant about petulant teenagers who hate the Japanese and blame them for all of GM's problems. Which generally isn't even the case on this site.

All I can say to this comment is "can't see the wood for the trees." Just look at your chum Carbiz's posts regarding the Japanese. He claims to be 47 and in my opinion, should know better. If you were well versed as an accountant, you'd agree about being cautious over publicised profitability because there are large unusual items that can come into play which doesn't affect GM's current assets whatsoever - such as last year's deferred tax reserve write-off. Most laymen wouldn't understand how this can affect the bottom line - and I wouldn't expect them to - but in GM's case it made a material difference to the understanding of the financial statements. As it stands, I take your comments about understanding a set of financial statements as seriously as PCS' claim that he was provided a 7 litre prototype sedan in Switzerland.

I don't care if anyone on here agrees with me or not over this. As a professional in this field, I recognise the issue. By the same token, if a NASA engineer discussed a problem with the Space Shuttles heat-deflection shields, I wouldn't have the first clue where to comment and I wouldn't expect that said engineer to take my opinions too seriously. For every one hardcore GM fan on here who doesn't agree with me, there are plenty of car enthusiasts - and professionals in my field - who do. It's nothing to do with being from different continents, or even different cultures - but everything to do with different mindsets.

Edited August 4, 2008 by aatbloke

[Newbiewar]

so what does a shareholder have to do, to get a closer look at the financials...

how can you have a revenue of 38 billion dollars and not have any room for extra items? where could it all possibly go? okay so the revenue isnt 42 like it has been recently... but still... when you deal with that kind of money, you'd think there would be a lot of fat to cut off...

i want to see a more indepth budget report then the lowsy financial balance sheet they give once a quarter

[CARBIZ]

All I can say to this comment is "can't see the wood for the trees." Just look at your chum Carbiz's posts regarding the Japanese. He claims to be 47 and in my opinion, should know better. If you were well versed as an accountant, you'd agree about being cautious over publicised profitability because there are large unusual items that can come into play which doesn't affect GM's current assets whatsoever - such as last year's deferred tax reserve write-off. Most laymen wouldn't understand how this can affect the bottom line - and I wouldn't expect them to - but in GM's case it made a material difference to the understanding of the financial statements. As it stands, I take your comments about understanding a set of financial statements as seriously as PCS' claim that he was provided a 7 litre prototype sedan in Switzerland.

I don't care if anyone on here agrees with me or not over this. As a professional in this field, I recognise the issue. By the same token, if a NASA engineer discussed a problem with the Space Shuttles heat-deflection shields, I wouldn't have the first clue where to comment and I wouldn't expect that said engineer to take my opinions too seriously. For every one hardcore GM fan on here who doesn't agree with me, there are plenty of car enthusiasts - and professionals in my field - who do. It's nothing to do with being from different continents, or even different cultures - but everything to do with different mindsets.

The trouble is, every time any debate involves you, it turns into a slug-fest and name calling. You bring out your your resume (which can be whatever you choose it to be) and use it to beat others with an opinon different than yours. Some people are easily intimidated when a poster breaks out the thesaurus - I am not one of them.

Do you know what MY resume is? No. Because I haven't said what it is. What did I take in University? Curious? I am 47, which gives me a wealth of life experience to back up my assertions. You don't see me going around knocking the 20 year olds on this site just because they have their own ideas, do you?

My mother is a retired CA and taught me plenty. I don't blame Japan Inc. for GM's woes: I blame Washington and Ottawa for not seeing that it is NOT a level playing field. Of course Toyota and friends are going to accept whatever help their government hands them.

I don't chime in about what GM should or should not do in Europe because a) I don't know Europe and b) I don't care. If GM and/or Ford do go bankrupt here or get 'bought' out, YOU should care because Japan Inc is not going to have the same interests at heart with respect to their European holding/heritage etc. as Ford and GM do.

I see the same type of polarized debates on some of the political forums I am on. The social engineers immediately cry 'racist', 'bigot,' 'seal killer' whenever someone in their midst disagrees with them. They are too obtuse to realize how it seriously undermines their position with the 'undecideds.'

Frankly, from where I sit, GM and Ford's plight mirror exactly what is wrong with our entire Western Civilization. No, I do not think I am overstating the case. We in the West must learn to reap the whirlwind of global trade and protectionism or we will be consumed by it.

Violence (or aggression) is the last refuge of the incompetent. Great quote. It gets more profound with age.

[nferr]

Good grief, Americans ... I'm not being a "smartass." I'm a qualified accountant. I'm telling you that unusual items, or one-time charges, are quite common with large corporations. Usually they're the product of accounting entries, but they can be expenditures caused by unprecedented situations - such as strikes or mergers. An unusually small profit or large loss can be the result of an unusual item, and GAAP/IAS requires that they have separate disclosure in the notes to the financial statements.

I'm not making excuses for GM - they've been running an aimless company now for the past twenty years, and that's why Toyota has been running rings around them. While Toyota has spent the last ten years in North America strategically placing models in virtually every segment from B-segment through to C-segment hybrids to full-size SUVs, GM has concentrated only on larger vehicles which yield the greatest unit profit - a highly risky approach in the event of soaring fuel prices or an economic downturn, and especially so in a country with a relatively small company car market such as the USA. The fact they decided to run up such an enormous deferred tax reserve was one of their accounting mistakes - that particular write-off contributed to a sizeable loss, however it was merely a book entry.

Continual loss-making is grave cause for concern and can only be carried on while the company has a positive balance sheet, since that denotes viability as a going concern. In other words, GM is continuing in business from its accumulated capital reserves. However, stories such as this are a case of journalists not being accountants. The media is out to sell stories - it's that simple. They often thrive on sensationalism to achieve that result. If you don't understand the mechanics of accountancy, you're not going to see the bigger picture.

Yeah, but a one-time loss is still a loss. You keep getting hit with massive one-time losses and you're still out of business. All it means is that the particular loss is not from continuing operations. It would be a lot better to be getting one-time gains wouldn't it? Right now GM keeps getting blasted by huge one-time losses and they're still losing money from continuing operations also. The cash drain is massive.

[Guest aatbloke]

The trouble is, every time any debate involves you, it turns into a slug-fest and name calling. You bring out your your resume (which can be whatever you choose it to be) and use it to beat others with an opinon different than yours. Some people are easily intimidated when a poster breaks out the thesaurus - I am not one of them.

Do you know what MY resume is? No. Because I haven't said what it is. What did I take in University? Curious? I am 47, which gives me a wealth of life experience to back up my assertions. You don't see me going around knocking the 20 year olds on this site just because they have their own ideas, do you?

My mother is a retired CA and taught me plenty. I don't blame Japan Inc. for GM's woes: I blame Washington and Ottawa for not seeing that it is NOT a level playing field. Of course Toyota and friends are going to accept whatever help their government hands them.

I don't chime in about what GM should or should not do in Europe because a) I don't know Europe and b) I don't care. If GM and/or Ford do go bankrupt here or get 'bought' out, YOU should care because Japan Inc is not going to have the same interests at heart with respect to their European holding/heritage etc. as Ford and GM do.

I see the same type of polarized debates on some of the political forums I am on. The social engineers immediately cry 'racist', 'bigot,' 'seal killer' whenever someone in their midst disagrees with them. They are too obtuse to realize how it seriously undermines their position with the 'undecideds.'

Frankly, from where I sit, GM and Ford's plight mirror exactly what is wrong with our entire Western Civilization. No, I do not think I am overstating the case. We in the West must learn to reap the whirlwind of global trade and protectionism or we will be consumed by it.

Violence (or aggression) is the last refuge of the incompetent. Great quote. It gets more profound with age.

Interesting that so far in this discussion, Croc labelled me as a "fool" and you deem that all accountants "should be shot" - so I see what you mean regarding your above quote referencing violence and aggression.

As a qualified accountant with many years experience both within and connected to the motor industry (no Carbiz, I don't change my stories like some of your hardline chums) then should the subject be an accounting issue, then naturally I'm going to step in with my professional opinion. That holds true irrespective of the country in which the issue is taking place. I've not once broken out my CV for anybody, but I do know that an experienced car mechanic would shudder if I said I could safely mix a couple of old cupped cross-ply tyres with some new radials. By the same token, an experienced accountant would shudder at someone making judgements to a set of accounts without analysing unusual items and brushing them off as an excuse!

There's nothing thesaurus-like about my dialogue whatsoever - that's yet another cheap shot which has gained you nothing.

Unlike you, I'm not in the least terrified of foreign competition; it makes the European arena extraordinarily interesting and I see the foreign ownership of companies manufacturing in the UK a benefit to the British motor industry. Furthermore, Toyota, Nissan and Honda (collectively known as "Japan Inc" as you eloquently put it) have each maintained massive investment in the UK motor industry for many years - their interests are quite clear.

On the other hand though, it's also interesting that you deem Ford and GM as taking "interest" in European marques' heritage, when I think of recent examples under Ford's jurisdiction, such as Jaguar's X-Type: take one Mondeo, shod it with four wheel drive and give it a body which apes a small XJ. Then there's GM's antics with Saab: pin a 1988 Cavalier/Vectra chassis to a body which looked like a Saab and voila, a 1993 900 series, or even worse - take a Chevrolet SUV and Subaru Impreza and given them Saab snouts. None of these examples is cherishing a famed European marque by any stretch of the imagination.

I think the real intimidation comes from your side of the fence: from the word go I've explained issues as to why profits can't all go overseas and how a company's domicile works for subsidiaries such as Vauxhall. Just because the reality of how company law works doesn't fit in with your child-like dreamed ideals for GM gives you absolutely no excuse to chastise me or belittle my profession whatsoever.

Edited August 9, 2008 by aatbloke

[Guest aatbloke]

Yeah, but a one-time loss is still a loss. You keep getting hit with massive one-time losses and you're still out of business.

That depends on the nature of the loss and the unusual item. Last year's deferred tax write-off was simply negating years of accumulated book-entry credits to the P&L - so the overall effect on the balance sheet was zero.

This is why it is very important to analyse unusual items - because they do not necessarily mean physical expenditure.

Edited August 4, 2008 by aatbloke

[Newbiewar]

That depends on the nature of the loss and the unusual item. Last year's deferred tax write-off was simply negating years of accumulated book-entry credits to the P&L - so the overall effect on the balance sheet was zero.

This is why it is very important to analyse unusual items - because they do not necessarily mean physical expenditure.

couldnt an asset that has depreciated in value be considered a loss, even if no cash or mortagage was involved?

[Guest aatbloke]

couldnt an asset that has depreciated in value be considered a loss, even if no cash or mortagage was involved?

The cost of all fixed assets with the exception of land (in most cases) is depreciated or amortised over the asset's estimated useful life and charged to the P&L. However the charge is not usually tax relievable, so for tax purposes a different method is used - such as capital allowances in EU states.

The cost of the asset less accumulated depreciation sits on the balance sheet as the net book value. When the asset is sold, it is compared to the NBV. If the amount exceeds the NBV, it is credited to the P&L, if not then it's a charge. In extreme cases of very large credits or charges, it can form the basis of an unusual item.

Edited August 4, 2008 by aatbloke