Who says an automaker needs at least 5 million units per year to survive? Daimler in Germany made $6.7 billion EBIT on sales of just 989,386 units in the first half year. Unlike other car companies who are sitting on such a big pile of accrued losses that no taxes will be due in the foreseeable future, Daimler made a healthy contribution to the government’s finances. Even after tax, the company is left with $4.2 billion for the first half year. This according to emailed statements by Daimler.
According to this statement, the second quarter was “among the best in the Group’s entire history.” His mustache trembling with excitement, Daimler CEO Zetsche said:
“With our excellent first half of the year, we are fully on schedule to turn 2011 into one of the most successful years in our long corporate history. We now assume that Group EBIT will develop more positively than we previously expected and will very significantly exceed the level of 2010.”
meanwhile Ally Bank reduces lease admin fees for a week on GM leases and select GM Card holders get a bump on their earnings.
profit vs struggle…the difference is management.
The difference is what’s company’s/management’s goal.
From what I can see Daimler, BMW, Audi, Lexus, they’re trying to build products that people want to buy. Attractive, (somewhat) reliable, pricy but usually worth it. With good products and sales there will be profit.
GM’s main goal is to make money. And they try different ways, but all fail because they don’t do that one right thing, manufacture good cars. They invent incentives, leases, family buys, group buys, corporate discounts, etc. Buy the products they sell are POS (in general).
It’s a greed that actually kills all US car makers (and not only car makers). They’d like to make money out of nothing. They probably have more people thinking on ways how to make more money out of thin air than people who actually do produce stuff.
They probably have more people thinking on ways how to make more money out of thin air
Geithner?
They can start making back the $45 billion (or was it $60b?)they lost on Chrysler. It still makes my head spin that they can get it so wrong thinking the synergies were there and that the two different corporate cultures could be persuaded to actually collaborate with that goal in mind.
“Mr. Zetsche insisted that Chrysler did not drain cash from Mercedes. Despite its recent losses, it generated nearly $15 billion in cumulative profits during the years it was owned by Daimler. But analysts said Daimler could have found better uses for the cash it poured into Chrysler.
“They spent about $60 billion acquiring, restructuring and investing in Chrysler over the last nine years,” Mr. Jonas of Morgan Stanley said. “Just think where the next $60 billion could go if it was invested properly.” ”
http://www.nytimes.com/2007/05/15/business/worldbusiness/15daimler.html
I’m not really worried about the how’s and why’s – but, the Daimler Chrysler merger spawned two of the best full sized cars that have ever existed. The Charger and 300. So if that cost $25 billion SO BE IT.
Mercedes’ fictitious losses were of their own making. Chrysler was the most profitable automaker at the time of the merger. Daimler basically stole all of Chrysler’s free cash, forced out their top engineers and executives, and refused to share anything with them except for what became the (execrable) Crossfire. Then, after they had stripped everything of value they had the nerve to complain that the merger didn’t go well and dumped them off to Cerberus.
I guess this article proves that Nickel-and-Daimler can make loads of money selling the bottom feeder C-class to people more interested in 3-pointed stars than actual value.
Chrysler was just a few steps away from bankruptcy when Daimler bought them, the years immediately preceding the buyout were full of losses.
+1 Forditude. German accounting is different from the US. And their is plenty of shenanigans that can go on in US accounting.
Scoutdude,
Chrysler had nothing but profits in the years before and up to when Daimler took over. Their best year was 1996, but in 1998 (the year of the “merger of equals”) they still had a profit and were not in any trouble of going bankrupt. Chrysler has never been close to bankruptcy in it’s 80+ year history except for 1980 and 2009. In 1980 the Shah of Iran was overthrown and the gas prices spiked, killing car sales. Up to that time Iaccoca thought they would pull through with the changes he had made and the new product coming out. But that geopolitical event was a tipping point (and one totally out of Chrysler’s control (like the Japan earthquake and tsunami was for the JDM)). Hence the need to seek loan guarantees from Uncle Sam. In 2009 the credit freeze, banking crises, and housing collapse caused Chrysler to file for C11 for the 1st time in their history.
“In 1980 the Shah of Iran was overthrown and the gas prices spiked, killing car sales. Up to that time Iaccoca thought they would pull through with the changes he had made and the new product coming out. But that geopolitical event was a tipping point (and one totally out of Chrysler’s control (like the Japan earthquake and tsunami was for the JDM)). Hence the need to seek loan guarantees from Uncle Sam. In 2009 the credit freeze, banking crises, and housing collapse caused Chrysler to file for C11 for the 1st time in their history.”
When I read things like that, I always wonder then why did Chrysler tip all the way over? Everybody else in the world was experiencing these same geopolitical events. And today the JDM is recovering okay from their localized events. Why only Chrysler? Isn’t it highly possible it also had something to do with the way the company was operated? Stronger companies seem to weather the storms a lot better. To me, it always sounds like excuses when it doesn’t work out for anybody else. It’s Darwinism of the corporate world, I’d say.
Ford and GM lost a TON of money at the same time. Chrysler being the smallest and having gone thru hard times of it’s own in the late 70’s (remember, they hired Iaccoca to lead a turnaround) couldn’t take the hit caused by the gas shortage.
Imagine if Ford had hired Mullaly but a year later than they did. And they didn’t mortgage everything including the logo until he came aboard. Mullay’s plans and leadership would have done the same things for Ford, but because he was a year too late they would have been caught up in Carmeggedon. Then Ford would have been in the same boat as GM and Chrysler and would not have survived without government assistance and C11. (Some argue that they got government loans anyway from the DOE)
If their EBIT is going to be that positive, Dieter ought to blow the dustballs off of the check book and pay someone to trim that ‘stache of his. He looks like a friggin’ Fuller Brush salesman.
This IS the trimmed version.
Yeah, so? With all their trucks and missiles they’re still pathetically chasing numbers with those Bavarian barbarians.