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General Motors Company Message Board

wngr123 202 posts  |  Last Activity: Jul 20, 2014 6:09 PM Member since: Oct 24, 2008
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  • wngr123 wngr123 Apr 23, 2014 7:07 AM Flag

    "Did not Chrysler file for bankruptcy in 2009?
    Are they still around?"

    I think you should look up the terms of the Chrysler deal.

    "I rest my case!"

    Good, because it's a stupid one.

  • Reply to

    $12B vs. $10B

    by lebu64 Apr 23, 2014 11:49 AM
    wngr123 wngr123 Apr 23, 2014 12:54 PM Flag

    "American car company?"

    Don't trust anyone that tells you this is an American company. GM is an international company and has been for a long time. And just like any international company, it has to go where the best markets are, and right now, one of them is China. GM does business in a little over 150 countries and produces vehicles in 37.

    Having said that, GM still makes more money in the US than anywhere else, and the majority of it's net investment is still here, but the trend is away from here. Margins are better elsewhere. Like all manufacturing jobs, GMs' number of manufacturing jobs in the US has been decreasing since the early 70's (other than a little uptick after the recession). The US market is stagnant with little hope of the kind of growth that will attract a lot of new investment. In addition, the US is an expensive place to do business.

    The actions taken by the US government were selfishly motivated. They know that GM is a multi-national, but their objective was to save jobs in the US. They knew that if GM liquidated, the replacement cars in the market would largely be produced in other countries thus exacerbating the recession and increasing unemployment here. The Center for Automotive Research wrote a report on the effect of a GM liquidation not too long ago. The government couldn't care less about the company GM, but wanted to protect the jobs here. And the report I referred to makes a case that it was money well spent.

  • wngr123 wngr123 Apr 23, 2014 7:03 PM Flag

    Cobra:

    Have you taken delivery of your Stingray yet? If so, what do you like/don't like about the car? Which version (body style, engine, gear box)?

    Would appreciate your input. Considering it myself.

    Thanks

  • His current manufacturing facility is the old GM Fremont/NUMMI facility which is sized to make 200,000+ cars per year, TESLA made 22,000 last year. He has signed leases for an additional 625,000 square feet of space in the past 2 months. He is searching for a location for his $5 billion battery factory.

    I'm tempted to say this is why TESLA can't make money, but he has become a billionaire and I am very reluctant to criticize what he's doing. I just don't understand it. Does he think there is that much unsatisfied demand out there for the Model S? Does he need this much space for the new model? I agree with Justum's comment the other day that the Fremont plant ought to be at least 75% empty (although I believe he does product development in that facility as well as assembly).

    Any thoughts out there?

  • GM post a $108 million PROFIT. Squeeze!!

  • Like:
    -Revenue up
    -Free cash flow up $1.5 billion
    -Net cash from Auto was $2 billion
    -$1.8 billion net pricing
    -Lower incentives vs 1Q13
    -Unadjusted EBIT for NA up $500 million
    -Cash up $2.7 billion

    Dislike:
    -Slightly less global share
    -Europe EBIT $100 million worse
    -International Ops EBIT down $200 million

  • "Cobra:

    Have you taken delivery of your Stingray yet? If so, what do you like/don't like about the car? Which version (body style, engine, gear box)?

    Would appreciate your input. Considering it myself.

    Thanks"

  • Reply to

    My Opinion is that they Cooked the Books

    by bustabords1 Apr 25, 2014 7:48 AM
    wngr123 wngr123 Apr 25, 2014 9:47 AM Flag

    "My Opinion is that they Cooked the Books"

    You're probably right, that's the reason they took $1.7 billion in charges.

  • Reply to

    Here are some golden oldies

    by justum_rev Apr 24, 2014 11:57 AM
    wngr123 wngr123 Apr 25, 2014 9:50 AM Flag

    "I do appreciate you posting all my quotes, everything is still valid. As a matter of fact the 50/200 SMA has gaped even wider! If you knew what a Bull Trap Pattern was, you would have seen it coming! If you knew how to use charting analysis you could actually turn a profit in your investments.What a poor dope, I swear! LOL !!!"

    Just for clarification on my part, what were you right on?

  • Reply to

    Here are some golden oldies

    by justum_rev Apr 24, 2014 11:57 AM
    wngr123 wngr123 Apr 25, 2014 5:15 PM Flag

    "Just for clarification on my part, what were you right on?"

    Defcon or Web, no reply or are you thinking how you can spin this?

  • Reply to

    Here are some golden oldies

    by justum_rev Apr 24, 2014 11:57 AM
    wngr123 wngr123 Apr 26, 2014 8:12 AM Flag

    "Just for clarification on my part, what were you right on?"
    "Defcon or Web, no reply or are you thinking how you can spin this?"

    Defcon, I know you are very busy and probably didn't get a chance to read my post, but I was curious about what it was that you think you were right on in the earnings release and stock price reaction.

  • Chebby:

    Based on what I can learn from the 10Q and earnings releases, below is my take on Q1. Sorry, but I think it's going to take a couple of posts.

    Here’s my analysis. It’s based on several key indicators that we like to look at to evaluate a company’s performance on a day to day perspective:

    -Income statement: In the auto industry, it is particularly good to compare data against the same quarter from the prior year because of the differences in spending during the year. Compared to 13Q1, revenue increased from $36.9B to $37.4B. What isn’t being reported is that the entire increase is from GM Financial and not car sales. I think that’s good for two reasons, a) GMF is continuing to grow, and b) global car sales held its own despite all the negative press.

    Operating cost increased $1.5B which normally would be a concern, but it was almost entirely explained by the charge of $1.3B due to the product issues. So, from a day to day operations basis, about level revenue and level operating costs. By the way, the famous $1.3B charge not only includes the cost of the ignition switch, but also the electric power steering recall and $250M for other issues.

    If you look at net income attributable to stockholders, independent of the special item (Venzuela currency) and charges (product issues), the $125M grows to $1.8B, which would have been a great number, almost $1B better than 13Q1(last year’s comparable number was $865M).

    -Balance Sheet: Equity remained nearly level in the past quarter which tells us that total assets and total liabilities stayed at the same balance. I know that some were saying the balance sheet would take a huge hit due to the pending recalls but that was incorrect. Equity of $42.8B was down less than 1%.

  • Reply to

    Cheblammo: My opinion about Q1 earnings

    by wngr123 Apr 27, 2014 1:44 PM
    wngr123 wngr123 Apr 27, 2014 1:49 PM Flag

    Continuing

    In the past quarter, there was no significant change in pension funds, automotive debt, and LT and ST debt.

    -Cash flow: There was also good news on cash flow. Operating cash flow improved from $819M in 13Q1 to just short of $2B this quarter. The reason that this number is important is that is an indication of the core business’ viability. GM’s core business is generating a lot of cash to do the kind of investment that a company needs to grow.

    Other items I’ve heard discussed: It is true that in NA market share has decreased a bit. When we take a closer look at this (slide 13 of the Earnings Announcement chart set), we see that the effect of the volume decrease to EBIT (earnings before interest and taxes) was $100M, but was more than offset by an increase in price of $1.7 BILLION in additional EBIT. Not a bad trade off in my book!

    Also, buried in the chart set is a slide (S5) that shows that not only did GM Finance delinquencies (over 30 days) on car loans go down from 5.8% in 13Q1 to 4.5% in 14Q1, but credit losses went down from 2.6% in 13Q1 to 1.8% in 14Q1. I know that RDH is VERY concerned about that.

    My summary would be that the underlying numbers of the quarter were a big improvement over last year and that’s the reason the stock reacted the way it did. I believe that long term investments should be based on the underlying health of the company, and in this case the company is improving. If you’re going to invest as a short, you had better be ahead of everybody else or you have the possibility of losing a lot of money on a special cause drop in the stock price. Just my opinion.

  • Reply to

    Here are some golden oldies

    by justum_rev Apr 24, 2014 11:57 AM
    wngr123 wngr123 Apr 27, 2014 2:18 PM Flag

    "Lets look at Earnings, For one, The $1.3 BILLION was NOT A SPECIAL ITEM, Their Profit Fell 85%!!!! Do you REALLY WANT to have a discussion on their earnings? The 24th was simply the Bon Voyage of GM Sinking Further Down."

    No, it was not a "Special Item". As you know from your accounting background (eye roll here) the difference better Special Items and extraordinary expenses are covered in Accounting 101 and the $1.3B was considered an extraordinary expense, not a special item. Nevertheless, you are mistaken if you believe it was not a hit to profit. This expense was covered in Cost of Sales on the income statement, so it was clearly an offset to net income. If you need further proof, please see slide 8 of the chart set accompanying the earnings release.

    This $1.3 billion charge together with the $400 million special item depressed net income $1.7 billion. Without these charges, net income attributable to common shareholders would have been $1.825 billion.

    I've never been one for technical analysis as a methodology for picking stocks, especially one that has had the price depressed by a particular issue. In my view, technical analysis is always backward looking, trying to predict the future based on the past. Not sure that works well, at least not in my mind. I would think it's particularly troublesome to use that methodology to short stocks because you have to wait for a trend to develop to give you a buy signal. By that time the drop may be nearly over.

    Of course, I have never shorted a stock either so what do I know. I'm more in the camp of evaluating the company based on financial data that is reported. Pick a healthy company and ride with it. I'm more of a blue chip, steady growth kind of guy and at my point in life, I really don't need any more money, I just have to protect what I have from the government and inflation...wait, maybe that's the same thing.

  • Reply to

    A little History of American Auto in Japan

    by jeyebolt2003 Apr 26, 2014 4:53 PM
    wngr123 wngr123 Apr 27, 2014 2:23 PM Flag

    "Sap-what is the only facility to ever manufacture jet fighters and autos at the same time?
    Fairfax"

    I didn't know that. That's pretty cool.

    The old Willow Run plant made B-24's and transmissions, but not at the same time. I wonder about Saab. They made both products, but probably not in the same factory.

  • Reply to

    Cheblammo: My opinion about Q1 earnings

    by wngr123 Apr 27, 2014 1:44 PM
    wngr123 wngr123 Apr 27, 2014 8:49 PM Flag

    "I'm sure a big part in the reduction of the delinquency rate was the decision GM made to start making prime loans out of GM Financial instead of just subprime as it was when it was AmeriCredit."

    I'm sure you're right. And I think it's a good business move to hedge the risk and grow the business.

  • Reply to

    Cheblammo: My opinion about Q1 earnings

    by wngr123 Apr 27, 2014 1:44 PM
    wngr123 wngr123 Apr 27, 2014 8:56 PM Flag

    "Based on this, I think I'm back to GM being a buy."

    I didn't mean to talk you into buying GM stock...or any stock at this point. As we all know, the overall business environment is a major component in stock prices and I don't have a great feeling about the market in general right now. In my personal investments, I been hedging with bond and international funds against an equity market decline.

    My only point with GM was that despite all the negative, and even hysterical reporting, there is still a financially solid company behind it all. Some times stock prices don't recognize that.

    In any case....good luck!!

  • Reply to

    JUSTUM AND WNGR

    by robert_dinero_here Apr 28, 2014 3:42 PM
    wngr123 wngr123 Apr 28, 2014 7:56 PM Flag

    "What do you guys make of GM's claim of 83 selling days worth of inventory?"

    I'm not sure what you mean. If you mean how do they calculate it, it's as follows for March:

    DS = Inventory / (Sales/Selling Days)
    = 815,042 / (256,047/26)
    = 815,042 / 9,848
    = 82.8

    For February:

    DS = Inventory / (Sales/Selling Days)
    = 805,769 / (222,104/24)
    = 805,769 / 9254.3
    = 87.1

    Selling days are the number of Monday-Saturday in the month. I suppose they take out national days, but I'm not sure about that.

  • Reply to

    Here are some golden oldies

    by justum_rev Apr 24, 2014 11:57 AM
    wngr123 wngr123 Apr 28, 2014 8:37 PM Flag

    "That's exactly what I said (eye roll here), Where did I say anywhere it was not a hit to profit??? I would like for you to point that out considering I even posted a topic on the board a couple days ago on just that."

    OK, let's say I misunderstood you. Do you agree that without the extra charges of $1.3B + $400M, net income would have been $1.98B? And that would have been compared to $1.185B last year? Would you agree that the underlying numbers were an improvement?

    "While you can't look past the hit GM took this quarter, you REALLY think the recall expenses are done?"

    I don't think we know that yet. There was $680 million charged for the ignition switches, if all 2.6 million vehicles respond to the recall (highly doubtful), that would be an average cost of about $260 per car. That seems more than reasonable to me.

    The issue of liability to the new GM remains to be decided. I estimate the maximum amount of liability might be in the area of $300 million ((13 deaths x 20 million) + (31 injuries x $1million) = $291 million)) if they are judged liable. I suspect that if the new GM is shielded, they would set up a fund of about $500 million to aid the families.

    These suits that contend that GM reduced the residual cost of their vehicles are frivolous. Their vehicles will be made better than they were new if the owner merely responds to the recall.

  • Reply to

    Here are some golden oldies

    by justum_rev Apr 24, 2014 11:57 AM
    wngr123 wngr123 Apr 28, 2014 9:38 PM Flag

    "Absolutely! Not debating that at all. The problem is this is still a significant hit on Q1!"

    Yes it was, and now it's history. In fact, it was well known BEFORE earnings release which is why the stock didn't react much after the initial run up.

    " if even if the suits for residual costs are frivolous in your opinion, that doesn't equate to a judges decision. That is just one of MANY cliff hangers as there are quite a few Class Action Lawsuits looming."

    I can't imagine someone other than someone sustaining a physical injury or death having a claim. How would you argue that you have been damaged after GM fixed your car free? And consider this, if the new GM is shielded or these suits are thrown out, that;s going to have a positive effect on stock. You're sitting on a pretty thin margin right now.

    "This will still cost GM at least a BILLION if not more imo."

    A billion MORE than already charged? I don't see it. What makes you think that?

    "Then there is GM sales. I am in the camp that would believe that sales will be impacted in light of the recalls."

    I might have agreed with you a couple of months ago, but sales seem to be hanging in there. In addition, don't forget that the US only accounts for about 2.5 million units vs a global total of 9+ million. Nobody cares about this outside of this country.

GM
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