Don’t point your browser towards The Truth About Cars today as it’s likely that Robert Farago’s saliva will end up dripping out of your monitor and all over your desk. It’s just my opinion, but I’m pretty sure the recession in the US is like a godsend to him.
General Motors just posted a huge loss for the first quarter in 2008. In typical GM fashion, the press release accentuated the positive:
- * First quarter revenue of $42.7 billion
* Positive adjusted automotive earnings before tax, with improvement of over $160 million
* Positive reported automotive earnings before tax, down by $118 million
* Adjusted net loss of $350 million, reported net loss of $3.3 billion
* Continued strong results in emerging markets
* Liquidity position of $23.9 billion
Don’t you love the way they slot that 3.3 billion dollar loss in the middle of all that positivity? The elephant in the corner of the room.
Automotive News tell it a little straighter:
General Motors said today it posted a net loss of $3.25 billion during the first quarter — the bulk of the red ink coming from one-time charges for its troubled GMAC investment and for continuing problems at supplier Delphi Corp.
GM also said it lost about $800 million in the quarter because of costs stemming from the UAW’s two-month-long strike at supplier American Axle & Manufacturing Holdings Inc…..
….GM said during the quarter it took a $1.45 billion impairment charge for its 49 percent stake in troubled financier GMAC. It also took a $731 million non-cash charge for estimated costs of supporting Delphi’s ongoing bankruptcy restructuring.
GMAC was once the unstoppable cash cow for GM but in a climate where there’s recession looming and a global credit squeeze, financiers are finding things a lot tougher.
GM say they’re still in good financial shape with decent liquidity and strong performances in places not named the United States. Many of the costs were related to things outside the core business of making cars and should be able to be resolved.
They ought to get things resolved pretty darn quickly, though, as the core business in the US is heading downhill fast and may soon join the non-core business in providing some real trouble for GM. Fuel prices are only going up and GM’s big margin vehicles, the SUV fleet, are about as popular as the guy who did a smelly in the elevator.
The time for big displacement is over. The time for smart engineering is now.
Let Saab run.