GM reports $15.5 billion loss

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By Alborz Fallah | August 04th, 2008

The big American three appear to be having more and more issues as consumer demands change from big cars to smaller more fuel efficient vehicles. So much so that General Motors, once the world’s largest manufacturer, has reported a $15.5 billion loss.

However that’s not the worst bit, the old general also suffered abysmal second-quarter earnings. General Motors’ North American quarterly revenue totalled only $19.8 billion, nearly $10 billion less than the same period 12 months ago.

If you’re wondering why that is significant, analysts generally view revenue as a strong indicator of an automaker’s health as it does not contain any one-time items.

“Revenue is a measure of the business going forward, they’re in a battle for their life.” said Dave Cole, chairman of the Centre for Automotive Research in Ann Arbor, Mich.

The company is contributing about 20 per cent of the revenue downturn to production lost during the strike at American Axle & Manufacturing Holdings Inc. Additional factors include the slowing U.S. economy.

However the biggest factor is the disappearing sales of high-profit trucks, a problem faced by all major three U.S. manufactures.

Not that there is much GM can do, having already announced plans to reduce annual truck production capacity by 500,000 units. CEO Rick Wagoner declared recently that the consumer shift away from big trucks is not a temporary trend and is here to stay. He says GM’s product plans reflect that.

So how will GM turn its fortunes around? Over the next 1.5 years, the company plans to introduce 19 new vehicles, 18 of which are either cars or crossovers.

There are even plans for a Chevrolet minicar early next decade, meanwhile the company is considering small cars for its Saab, Cadillac and Saturn brands as well.

One car which has so far given GM some hope, is the Chevrolet Volt, a plug-in hybrid that will debut in 2010. Even so, insiders say the car is expected to cost around $40,000 USD, making it a small-volume niche vehicle.

Meanwhile arch rival Toyota has taken the title as the world’s largest manufacturer, marginally outselling GM last year and posting record profits.

Will the company’s financial problems push it to the point of no return, or is this the begning of a new era for the company?

Minnow

Old news…. i think i’ll have to look back in the history books for when they last made a profit.
Genie

Minnow, their Q2 earnings was released only a few days ago, its not really old news, and I haven’t seen it mentioned on other car sites yet.

So, Ford lost $8.7 billion, GM lost $15.5 billion, this one up-manship is really getting out of hand. Having said that, Ford has the shining light of ford europe to pull them through, whereas what does GM have? Apart from the chevrolet volt, they have few near term options. The main issue is can GM restructure and re-size in time, because it costs a lot of money to close/retool factories, and thats what they are running out of very quickly.
topdog

Thats what happins when you just dont make good cars for the masses thay have relied on those truck things and tanks for so long thay havernt moved with the flow of what people want
Andrew M

this is what happens when you let stubborn americans decide the paths for the company.

if they werent so stubborn, and were man enough to admitt this years ago, then perhaps they could have more options.

perhaps i forgot it isnt the american way to admitt someone other than themselves have a better idea.

sure ford isnt as bad off as GM *AT THE MOMENT*, but if they dont consider production variants offered by the “cant put a foot wrong” Ford Europe and our very own aussies offerings, then the may take every one else down with them.

as said earlier, it is the great offerings from ford europe that are keeping ford alive.
ford europe is making 5 steps forward, and ford US is pegging 4 of them back again.

surely you dont have to be that clued on to realise what the problem is.
No Name

Same goes for GM in Europe Andrew M, I’m not sure of their profitability but certainly in Pommieland they’re selling decent enough quantities of really quite good stuff (Vectra excepted, but the Insignis should sort that). Indeed in June Vauxhall has the lions share of the market at 14.88% Ford at 13.3% and wait for it Toyota at a humble 4.48% (a decrease from previous months)
Andrew M

no name,
toyotas share has decreased in pommieland because there are no eskimos living there, hence no one to sell ice too
No Name

Just to add to previous comments Vauxhall have 4 of the top ten selling cars in June 08. Corsa, Astra, Zafira, Vectra. Carsa and Astra were top 2.

Plenty of penguins in our local zoo though, but there are reports they are depressed at Toyotas failing share of the UK market (down7.75% on last year; source SMMT)
http://integra What The ?

The reason Toyota dont sell much in Britain is that the people there like to drive cars that are enjoyable to drive and have character !!! Hopefully soon australia will follow suit…..
http://integra What The ?

apparantley GM are close to going bankrupt in the not too distant future………so say alot of bussiness experts in the USA.
Pablo

You have to wonder if Ford & GM have the sort of cash reserves needed to get them through years of huge losses.
$15.5 Billion…I get pissed off if I loose $20!
technofreak

No sympathy here. Arrogant and short-sighted decisions led to this nothing else. They lasted longer than I expected.
Ra

In the end it is thier allegiance to the Bush Government(s) and Oil companies that have made them suffer for now but will also probably, eventually, pull them through.

Read up about the fabled EV1 that was surgically destroyed by Oil companies and GM themselves.

I can only hope that companies like Tesla Motors thrive now especially with financial/moral support from new age thinkers like Larry Page, Jeff Skoll, etc
Garry

For the future of the car industry and who will be or not be around lets not forget there is a global giant now just starting to slowly wake up and when it is fully awake it will dominate this industry.The Big H from Korea
http://. Naughtyius Maxiumus

ANDREW M…..are you saying Toyota’s are cool as seems to me you may elude that? I dont think they are cool or even hot as devoid of style such as Celica or MR2! If one wants a hot cool looking Toyota – then they must move to Japan! Seems like heaps are obsessed of Toyota selling heaps and devoid of wanting classy lookers! BORING AS I SAY!
Adam (aka Mada)

The reality is US consumers buying patterns changed over the past 3 months at a pace no one expected, including Toyota. The depressed US economy is making some panic.

Toyota lost lost market share over the past 3 months in the US also, the only one to gain was Honda.

The main reason for this is Ford, GM, Crysler and to a lesser degree Toyota sold more SUV’s and pickups in proportion to passenger vehicles, so when the sudden shift occured they has less 4cyl passenger vehicles for consumers to choose from.

The articles also fail to mention that Ford and Gm’s 4cyl passenger vehicles are up by very healthy margins, US focus assembly plants are working overtime.

The main difference here is they don’t make the same profits on passenger cars like they do on pickups, Ford’s F series is still the best selling vehicle YTD.

Ford and GM will survive.
Joober

Question: Do any japanese brand cars overall sell well in Europe and England or EU to that matter?, I think because you can get Merc’s or Euros to that matter to a more commoners price over there, plus Euro vs Japanese thing. In Toyota’s part, I think Asia, Australia, US, or practically any non European nations are Toyota’s forte or pretty much their bread and butter.

Its the same goes whats the percentage of Ford/GM cars are sold in lets say Malaysia as compared to Toyota or any other Japanese brands, you’d be laughing too.

Its a give and take situation, but for toyota’s part they are dominating the regions where they are real players in whilst Ford / GM struggle or in a stale mate situation.
Fenno

If Tesla can bring out an high out-put electric car with the range it has, imagine what they can do with the range on low out-put electric commuters. GM should jump on this quickly and show Toyota a thing about really giving the customers what they want. Even if they only made $1 per car. It would still be better than setting fire to 15 billion.
Fenno

An after thought to that. They could just use the Tesla Technology and implement into their entire range. Including their pickups etc.
Savingf the need to shut down plants and change their entire tooling.
‘twould be to simple….
Of course that will never happen. The simplest solution is often the best…Something the Yanks have NEVER worked out.
http://realcars realcars

Agree with eveything u said Adam.

Spike in oil over the last few months has been a phenomena few would have predicted much like the sub prime fiasco and I believe these things are linked by the top end of town hedging in oil and other resources.

I wouldn’t right GM off just yet.
si1982

I sympathise with the workers at GM. The decisions are made by execs who simply move from one dept to another once they screw up anywhere, while when words like “cost cutting”, “cost efficiency” is mentioned then the finger is pointed towards the workers that are involved in the day to day operation of the plants etc.
Andrew M

way to twist my words there NM
gt2000

toyota will rule the world! oh sorry there already doing that! holden (bogan car company) will follow gm very shortly and no one can continue to operate with that sort of losses!
Andrew M

gt2000,

holden is part of the reason GM is still being held a float at the moment.
gt2000

the bogan minded company may be floating but the sharks are circling!
davie

I recall about 5 years ago, Ford (I think, maybe it was GM) was in a bit of strife and had a series of meetings to come up with their next 5 year strategy.

I dont remember the exact result but it was basically to stop development on a number of innovate ideas and put all their eggs in the “big stupid truck” basket.

Even then, fuel was creeping close to AU$ 1 and I remember wonering what would happen if fuel suddenly went up in price.

GM/Ford are also a victim of the ignorant and stupid mindset of the average soft headed American. GM/Ford are ciriticsed if each US model is not visibly updated and refreshed at least every 2 years “it looks like last years model boo hoo”. This is an expensive and unnecessary excercise in new sheet metal and styling development every 2 years just to keep the insecure and ignorant US consumer happy.

Meanwhile, toyota churns out the same camry for 4 years in a row with few discernable body changes and no one cares. They spend all their money on improving quality and the all important R&D instead.

Ignorant yanks have only themselves to blame if their icons die a slow death
silky

AndrewM, no offence but didnt holden just reports a loss?

TBH their 100 mill profits they make now and then are not going to dent multi billion dollar losses.I hope both Holden and Ford survive in OZ, but I cant see it unfortunately.
http://australiancaradvice Robbo

Fenno : in the real world, Toyota is showing GM how it is done and who has ever desired a car from GM, not me and certainly not no Korean Daewoo.

Andrew M : how is Holden keeping GM afloat when they have reported losses for the past few years themselves including latest report.

Keep dreaming, that’s all that’s left for some.
http://realcars realcars

Meanwhile, toyota churns out the same camry for 4 years in a row with few discernable body changes and no one cares. They spend all their money on improving quality and the all important R&D instead.

Sure.lol.

They certainly don’t waste any effort on dynamics or styling.LOL.

What is it with these Toyota freaks? Prefer something else and they call u a BOGAN.

Toyota is trading on their reliability reputation that is mostly a product of a focused and relentless advertising over many years.Your average Jack and Jenny lap it up and know little about most things and see Toyota as a safe option even though any car these days is reliable if serviced properly.
Andrew M

bugger,
i had money on the toyota tools biting at my earlier comment first…..
oh well i lose….
http://australiancaradvice Robbo

You can service a Holden or Ford everyday of the week and they’ll still be pieces of unreliable junk.
Joober

Davie

“GM/Ford are ciriticsed if each US model is not visibly updated and refreshed at least every 2 years “it looks like last years model boo hoo”. ” – Thats because all the us models look like sh$t everytime, so they need to reinvent and fail once again. European sectors bail them out but for how long…

Lol Andrew you failed on your fishing , the fanboys are not lurking tonight!
http://australiancaradvice Robbo

Holden hasn’t waisted any effort, they sell Daewoo’s to the poor bogon. I don’t see any cheap n nasty Korean junk at Toyota.
http://realcars realcars

Tools like Robbo perpetuate the Toyota myth.

And myth is all it is friends.

They are no more reliable than most other cars on the market.
No Name

Joober – your about right there with you comment of 11:37 above. Japanese/Asian cars are reasonably popular here but only get between say 0.1 and 5% of the market, the local boys get between 5 and 15% with Vauxhall and Ford at the top. type smmt (society of motor manufacturers) in google and download their monthly spreadsheets if your feeling particularly nurdy.
I might add that the European market IMO is much more steady market. Most car are 4cyl models, Utes are popular but nowhere near US and AU levels. Fuel has risen, folks have moaned but just accept it and drive on (slower).
http://realcars realcars

Plenty of cheap and nasty Thai junk at Toyota Robbo baby.
http://australiancaradvice Robbo

The fan boys will be here, they just probably carn’t be bothered with bogon attitudes. Add the market sales percentage of Holden and Ford for the month of July and it only just equals Toyota.

HE, HE, HE – the monthly laugh comes at the expense of the Aussie bogon (again)
Andrew M

how someone with the “mostest” “boganised” name (Robbo) could hate commodores is beyond me.

you have no idea about reliability robbo, and you way off the mark.

ive had many very reliable falcons
http://australiancaradvice Robbo

Realcars : that’s not what all those wonderful reliability charts say, Toyota at the top and Holden and Ford at the bottom.

Who i am gonna believe – JD Powers, Consumer Choice, RAC or a bogon with his head stuck in the sand from the ’70s

HA, HA, HA – the laugh is on you and your Daewoo lov’n Holden
http://australiancaradvice Robbo

1 temporary reliable Falcon doesn’t equate to many reliable Falcons. What did you do, start it up for a minute and then stop it again before it broke down. At least that way you can say it was reliable.

Does Ford still sell ear plugs to it’s customers so they carn’t here the rattles and squeeks. What about darkened sunnies so you carn’t see the faded paint, upholstery, crappy workmanship or rust.

You can be sure of one thing, everyday of the week at Holden and Ford are Friday afternoon cars. The only way they can guarantee consistancy, just not the sort of guarantee the market wants anymore.
Andrew M

robbo,
who am i gonna believe,
my very own more than acceptable experiences with fords,
or someone elses opinionative survey.

surveys are based on opinions, which are based on emotions.
no factual data is displayed in a phone poll result
Andrew M

robbo,
does toyota still provide rose coloured glasses with their vehicles?
they obviously still do because there are still individuals out there that can see no wrong with their toyotas.

news flash!!!!!
toyota is the number one recalled brand
Wheelnut

Robbo : Have you even toured the Holden Ford or Toyota Factory?… I have and I can tell you that Friday Cars don’t exist anymore because modern cars are so intricate so high tech that they are assembled more these days with the assistance of robots.. because they don’t chuck sickies, or get bored doing the same thing over and over again.. as as a result the quality in all locally built cars has improved.. particularly Ford and Holden
No Name

If thats the case Wheelnut then all Toyotas must be driven by Robots. None of the owners seem to get bored by driving dull uninspired cars, however if they could puke i’m sure they would.
Andrew M

thats right wheelnut,
ford and holdens quality has improved over the years, whereas toyotas is in damage control.

even the toyota execs are now admitting it
Wheelnut

Quote [Robbo]: 1 temporary reliable Falcon doesn’t equate to many reliable Falcons.

Okay yhen what aobut the tens of thousands of older Falcons and COmmodores that are still out on our roads?

You might say Fords and Holdens are unreliable .. but given that Toyota started n Oz in 1958 if they were as good as you would like us to believe and supposedly far more reliable than Fords and Holdens then why has it taken 50 odd years for them to become number one finally beating Holden which held the position for 10 years

I mean Surely if they are as good as you say they are people would have realised thios and switched over to Toyota and they would have sold s–tloads more cars than Ford and Holden and made No1 back in the early 70s… so why did it take so long?… hety Robbo… mmmmmm?

Because overtime [10 years+] Falcons and Commodores are more reliable not to mention easier and cheaper to repair than a Toyota.
Wheelnut

I realise that Ford and Holden sold more cars over that time and its only just recently that Toyota made it to No1

yet regardless of that fact.. my point is [using 1958 as a starting point] that all 3 of them have had equal opportunity to sell more cars than their competition and it Toyota are that f-n good they should have made it to No1 earlier that is all..
http://australiancaradvice Robbo

Andrew & Wheelnut – the laugh is on two monkeys, at your expense. The both of you nuts represent the true Aussie bogon. The image i have is you funny lads sitting at the bar talking about Sunbirds and Daewoo’s. That’s what Holden nuts do, right – talk about great Holden cars
Andrew M

a guy called “Robbo” calling others Bogans???
how ironic is that?? ha ha ha

i prefer the tried and proven formula thanks.
not the opinionated phone poll results pfffttt!!

and for the record, im not a holden nut.

sure i know a bit about holdens, but that only demonstrates my overall knowledge of various makes and not just the blind sided approach like you take.

i also know a bit about toyotas, and when you would kindly queue me in, ill start listing a few of their quality down falls.
if i do, i suggest you get yourself a crash helmet, because it is rumoured to hurt when one comes crashing back to earth
http://realcars realcars

BOGON MOTHS.LOL.
http://realcars realcars

Perhaps chaps we should start a thread called shit Toyotas of antiquity.LOL.

Sure had a good variety of Toyota shit boxes over the years but as u rightly say scant examples remain today.Thk Gawd.LOL.
http://realcars realcars

Yes Robbo the Sunbird was that good that Toyota used the GMH Starfire four in two successive Corona models.LOL.

At least the Sunbird handled and rode A LOT better and was a substantially stronger car. Those Coronas verged on the dangerous as reported in the motoring press of the day.

How soon some of us forget how incompetent Toyotas were even compared to the later and much maligned Korean offerings.
Dlr1

Realcars, don’t sweat the small stuff, its not worth the effort. Of course people will forget about about dull cars or cars that either failed to sell or failed to last. All the manufacturers have been guilty at some stage. Sure, alot of the Toyota range in the 60′s 70′s and early 80′s was ordinary, but then again Ford gave us the Cortina. Holden gave us the Camira, Mitsubishi the Sigma. Not to mention some of the rubbish that they tried to pass off during the late 80′s and early 90′s.
http://realcars realcars

U might remember wheels transplanted a 2.6 astron into a then new VH Commodore with 5 speed and got the best of both worlds as they put it at the time.

Sigma wasn’t a bad car in its day. The Turbo Peter Wherret special got excellent reviews at the rime.

The Cortina was also a good car in relative terms until they stuffed an iron big six in it. By the time they got to TF it wasn’t a bad thing as much even with the big six donk.

Early Camiras were rubbish but the final series was a beauty with the global mpi 2 litre that seen service in many different makes and models after the demise of the Camira.
I had a 5 speed wagon as a company vehicle at the time and 150,000 on it,was always fully loaded with gear and never missed a beat. Only had oil,pads and tyres and went and drove like a sports car.
gt2000

realcars & wheelnut you two are the optium of the aussie bogan you cant see past the fact that holden & ford in australia are dying it only bogans like you two that somehow see something good in these hopeless companys! realcars do your history the corona with the starfire engine was a australian govt plan (the button plan) toyota had no say in the matter and at the time toyota were discusted that our cars had a shitbox holden motor in them! in case you two dont know toyota are now selling more cars than holden & ford combined and thank god the australian public are way smarter than you two bogans! HOLDEN & FORD RIP! TOYOTA RULES!
gt2000

and i bet i can tell what you guys drive someone with a name like realcars would have to drive a daewoo barina and wheelnut that would be a ford ka! am i right, both magnificent examples of holden and ford manufacturing!
gt2000

and also realcars are you for real (joke) “the peter wherret sigma wasn’t a bad car in its day” that is the funnist thing i have heard in years! and the final series camiras where good cars, why do you make up this crap! do you realy believe the dripple that comes out of your mouth!
Adam (aka Mada)

It must be hard changing your name all the time, dingo!

Guys just ignore the the ‘troll’ If we feed him he keeps on spitting blah, blah.
gt2000

hey adam who are you calling a troll buddy! this is not dingo (who ever that is) check with caradvice if you dont believe me! i am a person with an opinion who gets sick of the dribble from the likes of realcars and his bogan mates. OK ADAM!