[lbo-talk] GM-UAW agreement

Jordan Hayes jmhayes at j-o-r-d-a-n.com
Wed Sep 26 10:06:31 PDT 2007



> I don't know how to handle these stats ...

I can summarize: your proposal to just have them pony up cash won't fly
:)


> the figures I had read suggested that GM was still making
> profit despite a dramatic decrease on last year, but that last
> year had recorded net profits.

Well, that's the good thing about being in the US and not being, say, in China: you can read them for yourself:

http://finance.yahoo.com/q/is?s=GM&annual

Net income for year ending 12/31/06: -$2B Net income for year ending 12/31/05: -$10.5B Net income for three year period ending 12/31/06: -$9.67B


> I think these falls are likely to be cyclical rather than long-term.

Check here:

http://finance.yahoo.com/q/bs?s=GM&annual

Look under "retained earnings" which is the closest you're going to come to "net income since the last major restructuring" and you get: a nice negative trendline from $15B at the end of 2004, $4B at the end of 2005 and $500M at the end of 2006 -- note that this is an accumulated number, not something to add up. If you click on the Quarterly Data link near the top, you'll see it goes down to $39M at the end of 1Q07 and is hovering at the "just less than $1B" mark. Add that to $40B in long-term debt, and GM is basicallly not a going concern.

Doug's summary earlier is what you're looking for:


>> The U.S. auto industry seems like it's run by a bunch of
>> morons, who've failed for the last 35 years to respond to
>> Japanese competition.

If that's "cyclical" then your analysis is better than mine.

Joanna asks:


> Take over operations?

I think that's a pretty big presumption that it's Just Current Management that is screwing things up. How have other large scale failures worked out when the latest restructuring involves the workers taking over? Ah yes, here's a good one: airlines.

/jordan



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