GM’s incredibly sobering 10-Q…
Late yesterday, after a day of headlines like this one, General Motors (GM) filed an incredibly sober 10Q. Weighing in at 337 pages, GM seems to be worried that folks might not get through the whole thing. So they started off with a wallop of new disclosures, including this one:
We have had significant losses from 2005 through the nine months ended September 30, 2008, attributable to operations and to restructurings and other charges such as support for Delphi and future cost cutting measures. We have managed our liquidity during this time through a series of cost reduction initiatives, capital markets transactions and sales of assets. However, the global credit market crisis has had a dramatic effect on our industry. In the three months ended September 30, 2008, the turmoil in the mortgage and overall credit markets, continued reductions in U.S. housing values, historically high prices for energy, the high likelihood that the United States and Western Europe have entered into a recession and the slowdown of economic growth in the rest of the world, created a substantially more difficult business environment.
And, just in case it’s not exactly clear what GM thinks needs to be done, the 10Q goes on to say that, “We do not believe it is likely that these adverse economic conditions, and their effect on the automotive industry, will improve significantly in the near term, notwithstanding the unprecedented intervention by the U.S. and other governments in the global banking and financial systems.”
And, just in case there’s still some doubt over exactly how troubled GM is — cue the club over the head here – the company mentions the words “going concern” — an accounting-speak term that scares the daylights out of most investors — no fewer than 15 times in the filing.
The filing also mentions the discussions with various members of Congress as well as the discussions last month with Chrysler, though neither Nancy Pelosi nor Chrysler is actually named in the filing.
Meanwhile, Bill Ackman has somewhat different advice for GM: file a pre-planned bankruptcy.
So grab another cup of coffee and tuck into GM’s filing. At 337 pages, you should be done in time for lunch, assuming that you skim.
Image source: Associated Press
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November 11th, 2008 at 1:14 pm
Why is wagner still there? FIRE HIM!!!! And If GM goes bankrupt, then what? They start at zero and still go down from there? WAKE UP!!
November 12th, 2008 at 8:33 am
I want you to read an article I wrote this morning at http://www.KeepAmericaAtWork.com and the reason is that no manufacturer, retailer or raw material producer is going to survive if we don’t stop this hemoraghing of our working citizens.
article follows —
Polls,
You love them or you hate them or in my case, you distrust them because they don’t provide the detail so that you can verify the accuracy of the data.
But on the other hand, I’m noticing some interesting things in the “Employed” poll that I am running this month.
As of right this minute we have:
19 employed for 57.6 %
7 unemployed for 21.2 %
5 looking for 15.2%
2 gave up for 6.1 %
Now according to the cia’s web site we have about 300 million people in america, so lets divide that into 3 age groups.
Lets make the assumption that 100 million are under the age of 18 which leaves 200 million.
So we have an age group from 18 - 98 and 200 million people
A lot of people either retired at 65 or possibly were forced to retire at 65 which leaves from a total of 70 working years:
33 years of retired people and
37 years of working people
That is awful close to 50 % this early in the morning.
So these rough numbers tell me we should have 100 million working and 100 million retired as approximate numbers.
Now I read in one of the government reports a while back that our government uses 150 million workers which makes me wonder how they arrived at that number, but thats another topic at a later date.
So we have 100 million workers, now lets deal with the numbers above and we’ll add the 19 employed and the 5 looking for a total of 24 working and we’ll add the numbers of 7 unemployed and 2 gave up for a total of 9
So now we have the numbers of 24 and 9 which gives us 33
So now we will divide 100 million by 33 and we get 3,030,303 per number
So now we’re going to multiply 3,030,303 times 24 and we get a working population of 72,727,273
And now we’re going to multiply 3,030,303 times 9 and we get a unemployed populaton of 27,272,727
Damn, does that give us an unemployed percentage of 28 % instead of the 6 % our experts are telling us.
Now do you see why our economy and the economy of all the democratic countries is suffering right now ?
As for you other democratic countries, run the numbers on your own country and if your leaders have followed America’s lead and sent your jobs offshore, then that will explain why you’re going through the same problems we are.
November 12th, 2008 at 4:52 pm
Virgil,
Check your math, that should be 33 years of retired people and 47 years of working people, so it’s more like 60%. And yes, if you include discouraged workers who gave up looking, part time workers who want full time work, and recently unemployed, you will get a much higher unemployment rate than the gov’t figure. Lots of blogging on this topic.
November 12th, 2008 at 7:37 pm
1. Declare bankruptcy
2. Renegotiate all labor contracts. $75 an hour labor costs are outrageous for line workers. Cut that to what the imports pay their workers. If the company makes money, then the employees can partake in profit sharing. If not, then the company goes out of business and everyone finds a new job.
http://mjperry.blogspot.com/2007/07/uaw-pricing-themselves-out-of-market.html
3. Health benefits for the retirees are slimmed to nothing but lifesaving. Viagra and the $17M the GM health fund pays (2006) for this drug annually for the retirees is way beyond normal.
http://www.consumeraffairs.com/news04/2006/04/gm_viagra.html
4. No more $28M salary expenses for Mulally or the like.
Stop interfering with the free market. Don’t give Detroit any money. None. Let the unions and management really understand they are responsible for their own mess and they must clean it up.