GM’s SEC Filing, Form 8-K, August 7, 2009 is 3100 pages long. Full marks, then, to someone at Autocar [UK] for reading the document and winkling-out this bit about the Volt’s viability (there’s that word again). Props, also, to our Justin Berkowitz for finding the unidentified source of Autocar’s report and doing same. It should be noted that SEC filings, like all corporate disclaimers, are obliged to moot the gloomiest possible scenario (i.e., CYA). Even so, this is pretty sobering stuff, considering it was released four days before the 230 mpg hoopla.
We intend to invest significant capital resources to support our products and to develop new technology. In addition, we are committed to invest heavily in alternative fuel and advanced propulsion technologies between 2009 and 2012, largely to support our planned expansion of hybrid and electric vehicles, consistent with our announced objective of being recognized as the industry leader in fuel efficiency. Moreover, if our future operations do not provide us with the liquidity we anticipate, we may be forced to reduce, delay or cancel our planned investments in new technology.
In some cases, the technologies that we plan to employ, such as hydrogen fuel cells and advanced battery technology are not yet commercially practical and depend on significant future technological advances by us and by suppliers. For example, we have announced that we intend to produce by November 2010 the Chevrolet Volt, an electric car, which requires battery technology that has not yet proven commercially viable. There can be no assurance that these advances will occur in a timely or feasible way, that the funds that we have budgeted for these purposes will be adequate or that we will be able to establish our right to these technologies. Moreover, our competitors and others are pursuing similar technologies and other competing technologies, in some cases with more money available, and there can be no assurance that they will not acquire similar or superior technologies sooner than we do or on an exclusive basis or at a significant price advantage.
Read the risk factors section of any company’s 8K and you will become convinced the end is nigh. The purpose of that section is to document the possible worst case scenarios, and in so doing to try and head of potential future shareholder lawsuits if anything goes wrong. Move along, nothing new to see here.
I have to agree with John Horner. This is bog-stock wording, and eligible for the “No Sh*t, Dick Tracy” award, i.e, “…if our future operations do not provide us with the liquidity we anticipate, we may be forced to reduce, delay or cancel…”
As for the part “There can be no assurance that these advances will occur in a timely or feasible way, that the funds that we have budgeted for these purposes will be adequate or that we will be able to establish our right to these technologies…,”: if those words came from a reputable and known-profitable company, I’d seen them as a fair statement of risk. Considering the source here, I take them as foreshadowing of what we’ll be hearing in two years.
Plenty of excuses to go around in there, too, including those nasty competitors who might do it better, faster, or cheaper.
John is right…BUT…it’s interesting that they specifically called out the Volt as an ‘example’. Sounds much more CYA than Worst Case Scenario.
try and head of potential future shareholder lawsuits if anything goes wrong.
So…which shareholders do you think will sue GM first when the inevitable happens? The U.S. government, the Canadian government, or the UAW?
Yes, it’s pretty standard disclaimer language that you see in any official filing (and press release, for that matter).
Still, it’s a useful reality check to see that as of August 2009 GM still considers the Volt’s battery not to be “commercially viable.”
Greenblood: Since Volt is being hyped as GM’s Great Green Hope, it is appropriate that they identify the basket in which many of their investment bucks, hopes and dreams are being carried.
I’d venture that an earlier draft of the statement was much more generic and that the “For example” aside was inserted following a legal review.
It just goes to show that Volt is a “bet the farm” proposition for the New-ish GM.
GM has always said the Volt would be a money-loser, and for a long duration after launch.
There is truth in the part about GM’s competitors. The playing field will be very rough for the Volt in late 2010.
But if GM is “too big to fail”, then Congress can just open the money valve again to make sure the Volt remains available as “the kind of car the people want”.
Most companies call this a “Safe Harbor” clause.
It means that if our rosie predictions don’t materialize, here are the possible reasons.
As many have said, yes this is common boiler plate language for an SEC filing.
BUT.
For example, we have announced that we intend to produce by November 2010 the Chevrolet Volt, an electric car, which requires battery technology that has not yet proven commercially viable.
This is not saying that all hell could break loose and that they could lose liquidity.
This is saying that the battery technology has not yet proven commercially viable.
That’s more than just standard risk assessment wording to me.
I’ve read plenty of 8Ks before but the sheer size of this one 3100 pages(!) should alert any sensible observer to the fact that there are almost certainly a few catastrophically damaging disclosures carefully hidden within the document.
I’d bet that there are about 10 pages worth of jaw-dropping revelations, another 90 or so pages of necessary legalese and 3000 pages of fluff to disguise the 10 pages worth that they desperately want you not to notice.
Remember this is GM, accountability is their sworn enemy.
As has been said before, this is pretty standard stuff in the context of typical 8-K filings. Nothing to see here.
“Remember this is GM, accountability is their sworn enemy.”
Priceless!
This is saying that the battery technology has not yet proven commercially viable.
That’s just a factual statement. They’ve made a big deal about it, so they have to CYA by saying that the big deal may not turn out to be such a big deal, after all. They would say this no matter what.
This is almost certainly a way to protect themselves against the VEBA and any future shareholders that they may have. If everything implodes, they just shrug and say, “We told ya so.”
This is saying that the battery technology has not yet proven commercially viable. What are the chances of a Volt catching fire while charging in the middle of the night inside someones garage? That scenario would doom the car and GM.