The Tragedy of General Motors

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The Tragedy of General Motors http://money.cnn.com/magazines/fortune/fortune_archive/2006/02/20/8369111/index.htm
-- "...guarded by a tired cohort of Roman Heavy Infantry"

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Does your post mean I can post links pertaining GM again?
There were a couple posts stated that my posts were old news and and supposedly violated the rules of alt.autos.gm.
I have since kill filed those posters!

http://money.cnn.com/magazines/fortune/fortune_archive/2006/02/20/8369111/index.htm
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If I screwed up I apologize. I had assumed that a post on GM was appropriate.

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I also found that article very interesting and to the point.
Even though I dont't call others "bub". I do place a period at the end of my sentences!

http://money.cnn.com/magazines/fortune/fortune_archive/2006/02/20/8369111/index.htm
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http://money.cnn.com/magazines/fortune/fortune_archive/2006/02/20/8369111/index.htm Do you think that if GM built cars equal in quality to the Japanese, and if they paid salaries and benefits that are reasonnable, that people would get a better value for their money and buy their cars?
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snip

I was the owner of a 1990 Plymouth Grand Voyager for 13 years. Twice, it went to the shop for major transmission problems, under warranty. The transmission went a third time and I had to pay for the repairs. The 4th time, I said, enough! Sold it! After only a few years, the paint started to peel on the roof and the hood. When that happend, I started to notice the same problem on many other Chrysler vehicules. So, I have been fooled, as you say and, although Chrysler may build better vehicules today, I still will stay away for ever from them, out of retribution for what it cost me in repairs and maintenance while I owned the van.

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snip

At the same time, an article I read not too long ago was saying that the Cobalt had the worst collision results in its class.
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snipped-for-privacy@gmail.com wrote:

IMO GM's vehicles are of inferior design, in fact many aspects of them are very out dated.
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Well said. I feel Ford has a chance, with the influx of new ideas from Volvo, Mazda etc. GM seems to be resisting new design ideas, their bean counters are simple importing new cars of questionable quality from Asia; such as Korea.
Both are stuck with loses on truck type SUVs and plum union contracts.
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The ill-informed John Horner wrote:

John, the true measure of Hyundai's success or failure in this program is not sales or market share. It is profitability or losses at the bottom of the Income Statement and how it all shakes out on the Balance Sheet. Have a look at Hyundai's Balance Sheet and Income Statement John. Years of horrendous Operating Losses. Then let us know your opinion on how well Hyundai is doing. ;-) You just may find that their massive Deficit in Retained Earnings suggests that they are insolvent. (A nice way of saying bankrupt.) And don't be fooled by that big figure called "Capital Adjustements". Korean G.A.A.P. (Generally Accepted Accounting Principles) are not at all like U.S. standards. Daewoo being a case in point. Here's a link to Hyundai's Balance Sheet John. After reading it, give us a more informed opinion on how wise Hyundai was with their aggressive warranty. Increased Sales don't mean squat if you're losing money on every sale!
http://www.hyundaicorp.com/eng/ir/balance_sheet.asp

Yah John, just like it added value to Hyundai. *nudge, nudge. wink, wink* You may have been saying it for a long time John, but that doesn't make it true. ;-)
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Ah yes, now GM is a real example of a healthy corporation:
http://www.gm.com/company/investor_information/earnings /
" GM reported a loss of $8.6 billion, or $15.13 per share for 2005, compared to net income of $2.8 billion, or $4.92 per share in the year-ago period. Revenue was $192.6 billion in 2005, compared to $193.5 billion in 2004."
Yes, I have been saying for a long time that GM should put it's money where it's mouth is and improve it's warranties. I still maintain that doing so would make a great deal more sense than does putting thousands of dollars on cars and selling over 20% of factory output to rental car companies does.
GM keeps telling everyone to "trust me, our cars and trucks are much better made now". Why doesn't GM put it's money where it's mouth is?
If the quality is there, then longer warranties would cost GM next to nothing. I have yet to hear a solid counter argument to this point.
As far as Hyundai financials, it is almost impossible to separate out Hyundai's automotive business from the many other pieces of their business. It is possible, however, to see the rapid sales growth Hyundai has enjoyed.
GM boosters throwing stones at other company's financial reports is one of the funniest moves ever. You seem to think that you are better informed than I am. Enjoy your self-delusions.
John
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Cool Jet wrote:

GM is that master at losing money on every sale. Around $1000 per vehicle in 2005 being the most recent example.

Hey Cool Jet, you referenced the wrong company. Hyundai Corp isn't the Hyundai which makes automobiles. The company you provided a link to does shipping, natural resources, etc. I realize that you know next to nothing about the structure of Korean industry, so your mistake can be understood and forgiven.
By the way, none of the other characteristics you have creatively imagined about me in your various messages are correct, except that I am indeed male.
The Asian based automobile companies are kicking GM's butt. That is a fact you seem to find impossible to accept even though the evidence is plentiful.
John
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John Horner wrote:

John, you have verified my suspicions that you are quite the dumbass. Hyundai Corp is indeed the parent of the auto maker. Do your homework. Send them an email and ask them. ;-) It took you over a day to respond to my post. Surely, you could have researched your information better during that time! I was once their corporate banker. ;-)

John, believe me, I have your number and its right on the money. You are an ill-informed buffoon.

Proof again that you don't know the difference between sales and profit. Do your homework John. Take a Basic Ecenomics course and learn how to read a financial statement. Oh right - it's not your style to deal with factual information. Only idle speculation. lame John. Really lame! ;-)
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Since the automotive division of Hyundai Corp. makes up about 1% of total sales of the parent company, I'd say the income statement for Hyundai Corp. is meaningless for this discussion. Why do you look at Hyundai Motor's income statement and get back to us. Looks pretty healthy to me:
http://ir.hyundai-motor.com/eng/index.html
$7.60 earnings per share. $1.7 billion net income in 2004 on $27 billion in total sales. Quite a bit better than GM, I'd say.
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snipped-for-privacy@hotmail.com wrote:

chrisvillar, take it from a corporate banker, if the ultimate parent of of any wholly-owned subsidiary is financially unstable, so too is the wholly-owned subsidiary. Any subsidiary can be made to look profitable through inter-company pricing and interest-free intercompany loans/debentures. But the bottom line is that all/any subsidiaries of an insolvent company are, in essence, also insolvent. Once again, I would refer you to the conglomerate - Daewoo Corporation. Their story says it all. They were a very diverse company and the "Motors Division" was only a small piece of the puzzle. Their bottom line was that the parent and subsidiaries were all considered insolvent, after removing the "smoke and mirrors".
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Are we talking about financial stability or operating efficiency?

Three or four messages ago you presented the finacials of Hyundai to support your analysis of the failure of Hyundai Motors, even though the motor division makes up about 1% of the sales of the parent company. But now when we drill down to the specific financials for Hyundai Motors, which doesn't support your analysis, financials are all smoke and mirrors.
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snipped-for-privacy@hotmail.com wrote:

Uhhh chrisvillar, I could swear that the comment above your question says (and I'll quote!) "financially unstable". I trust that answers your question again! ;-)

*shaking head in disbelief* Uhh chrisvillar, I don't have a braille copy of my previous post, but I will quote from it once again, "chrisvillar, take it from a corporate banker, if the ultimate parent of any wholly-owned subsidiary is financially unstable, so too is the wholly-owned subsidiary." chrisvillar, that's a pretty straightforward statement, but let me try getting through to you another way - If the parent is insolvent, the results for Hyundai Motors mean nothing. Has the light come on yet chrisvillar? ;-)
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snipped-for-privacy@hotmail.com wrote:

P.S. chrisvillar, I'm not sure what you're reading, but on Page 34 of the Report, Total Sales for 2004 are reported at $ 50 Billion U.S., not $ 27 Billion and on Page 35, Net (after Tax) Income was reported at $ 1.6 Billion U.S., not $ 1.7 Billion U.S.
Earnings per share are reported at $ 7.09 U.S. and $ 7.07 per fully diluted share.
But the aforementioned results are altogether questionable, when you read the closing remarks of the auditors, found on Page 32 of the Financial Report. This is a direct copy:
"Accounting principles and auditing standards and their application in practice vary among countries. The accompanying financial statements are not intended to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries other than the Republic of Korea. In addition, the procedures and practices utilized in the Republic of Korea to audit such financial statements may differ from those generally accepted and applied in other countries. Accordingly, this report and the accompanying financial statements are for use by those knowledgeable about Korean accounting procedures and auditing standards and their application in practice."
If those comments don't cause you concern, they should, because Korea is infamous for their, shall we say, "creative accounting". ;-)
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Cool Jet wrote:

Man, I didn't dive into the 65 pager. I'm just looking at the non-consolidated statement of income for the year 2004 on the website. It shows the numbers I quoted above.

Aren't you the same person who started this whole thing by referencing the financial statements of Hyundai Corp.? Are korean financials, and financial statements in general, reliable or not? You started this thing.
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