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GM delivered its October surprise by posting what Reuters calls “a surprisingly strong profit.” In a bit of a hail Mary pass, GM said it is targeting a return to break-even levels in Europe by mid-decade.
GM’s third-quarter net income fell to $1.48 billion from $1.74 billion a year earlier. Excluding one-time items, GM earned 93 cents a share, surprising analysts who expected only 60 cents.
In Europe, GM expects a full-year operating loss of $1.5 billion to $1.8 billion, depending on what restructuring costs will be in the fourth quarter. GM hopes for slightly better European results in 2013, and to reach break-even there by mid-decade. Hope springs eternal, especially in the week before the elections.
34 Comments on “October Surprise: GM’s Q3 Numbers Better Than Expected...”
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with an almost zero cost of capital, handouts from unwilling taxpayers, and after having screwed Tom, Dick, and Harry of everything from pensions to legal entanglements to living wages to franchise agreements, it’s really no surprise this outfit shows a profit. too bad they are incapable of doing so the old fashioned way, earning it by besting the competition.
meanwhile we get nothing more than the usual promises and never ending excuses. it’s getting really old…
GM and Chrysler are alive and kicking and people still have to find something to complain about.
Truth hurts? They’re “alive and kicking” thanks to our tax dollars.
“our tax dollars”
Whose tax dollars? Whose name is on a dollar bill?
^+1 (:
Well- at least our tax dollars is doing something productive. What’s the problem?
Can’t speak specifically to the cause of Chrysler’s volume, but I do know that GM was pumping up the jams with extremely aggressive lease rates on their badges far and wide.
But hey, if it takes $169 month/$0 down leases on Chevy Cruze LS’ and $199 month/$0 down on GMC Acadias to move the metal, that’s what it takes…
People need wheels in even bad economic times, and lower price points (as VW & Toyota have demonstrated) are just the ticket to pile ’em high and ship em deep!
It’s hard to best state socialist foreign competitors like JapanInc, Hyundai, VW, Volvo but GM is setting the stage for a great comeback. Forward!
Kudos to GM for donating 50 trucks to the Red Cross Hurricane Sandy relief effort.
This post approved by the Republican National Committee.
When I started reading Buickman’s writings, I thought he was writing about Mitt & Bain’s business plans when they take over a business.
I second that.
From the minute GM announced they would publish Q3 results early enough to be pre-election, did anyone have any doubt the results would be better than expected?
Akerson is supposedly a Republican. There was a semi-plausible argument in both directions.
Cue the inevitable Romneyite shrieking.
I think Obama is the lesser of two evils compared to Mitt.
But that doesn’t mean I support the auto bailout.
Where are we in the GM cycle of cooking the books and reporting OK years for quite a while, and then reporting one disaster year?
The current UAW contract goes all the way through 2015. Look for GM to sandbag in 2015 in order to scare the union.
The UAW has representation on the board, just as in Germany (where co-determination make unionization sustainable), GM won’t be able to sandbag anything, the union will know the true state of the company.
UAW management will know the true state of the company, provided they’re sentient. The UAW rank and file? Four legs good. Two legs better.
And with 1 week to go till the election, and a dozen of electoral votes in Michigan and Ohio….Chrysler and GM post good numbers!
What a coincidence!
So does anyone have a dollar figure for what the bailout actually cost each individual taxpayer? I know I can attach a 6 figure loss to what our house sold for this spring versus what it cost to build in 2004. I did sell my 1st home in 2005 for a 6 digit gain after 5 years(Over 2X what I payed for it) of ownership but the loss on our second home was more than double that. I mention it becasue it’s all tied together. GM and Chrysler did fail while the rest of the economy was humming along nicely.
Last estimate I heard was that the total cost for the auto bailout stood at somewhere around $25 billion as of August, assuming GM’s stock prices stays where it is/was.
Of course, the baseline isn’t really $0, it’s the basically unknowable cost of having GM and Chrysler collapse, along with who-knows-how-many suppliers and related businesses. Given the number of people who would have had to go on welfare, I think $25 billion is a pretty good deal.
The wall street bailout(financial institutions, institutions that would have failed without access to money markets so were given access to fed window, FDIC registered financial institutions that are paid interest on their insurance deposits with the FDIC, non-FDIC institutions that can borrow from the fed at 0% and buy treasuries at 3% with the same money) or of just the auto industry, one would be rather large the other quite small*
*small relative to american thinking on national debt (regardless of party), unless that debt is for disaster relieve, auto bailouts, etc. than its bad. debt for tanks army says it doesn’t want or need, or financial institutions, etc. than its good. (had to throw one political jab in just for the sake of it)
Shoot me down if I’m wrong, but by my accounting the actual cost was $0 per tax payer…..
Why do I say that, because unless you suddenly got hit with an additional Tax bill labelled bail out, then the tax payer did not really pay any more money.
I have to say as an Australian I’m bemused why the B&B can’t move on from this issue. We all choose to elect a Gov’t by majority, sometime our guys get elected but sometimes the other party. If you don’t like that system aren’t you attacking your own national identity, and the values of your country?
I’m mean who genuinely thinks that every decision in the USA is decided by the President?
I was looking for more of an average dollar amount the bailouts cost each taxpayer. I know people that had to sell their homes due to things like divorce and both were put into financial ruin because they couldn’t sell them for anywhere near what they had payed when the economy was good. Even when they were prepared to take a 6 figure loss. Again the whole housing bubble and the auto bailouts are completely connected.
For me that’s the bigger picture, not that a few of my tax dollars that were spent on the bailouts. If that hadn’t happened the government would have sent me check? Probably wouldn’t have been enough to fill the gas tank in my lawnmower!…….LOL
Just because for a while people were able to sell their homes for significantly more than they paid for them does not mean that they were operating in “a good economy”. The whole system was proven to be a house of cards, the possibility of the housing price increases continuing were in hindsight by most everyone obviously unsustainable.
As far as what the bailout cost, seeing as how the US Gov’t holds an equity position that it still has not sold, the jury is out. If for some unfathomable (to me) reason GM stock should rise significantly and the government actually see a positive return on their (our?) “investment”, then that would kind of invalidate the argument you seem to be making as it would not have COST the taxpayer anything. There are many government expenditures that seem to be even more egregious and of even lesser benefit (a certain bridge in Alaska comes to mind…)
The housing bubble bursting is what caused the slowdown in the auto markets which then begat the bailout, not the other way around. Most people who purchased a home and then were looking at a 6-figure loss way overpaid to begin with which can be figured out by looking at the increase in the market in the years before they bought that particular property compared to longer-term averages. VERY FEW people who purchased their home only 10 years ago are currently underwater. VERY MANY people who purchased their home 5 years ago ARE underwater. That tells you something…
If the only way you can afford to purchase a home is with TWO people contributing a significant portion of their paycheck, then you are buying too much home. Yes, there are plenty of areas where it seems that there is no other option, but that option opens you to significantly more risk. Plenty of people are moving from ridiculously priced areas to extremely nice areas where this is a non-issue. We moved from the SF Bay Area to Northern Colorado precisely due to this. We have found our quality of life to be immeasurably improved and do not particularly miss our old surroundings, we can now afford to visit whenever we feel the urge…not often, and thus have ended up visiting other places we have always wanted to go to.
“Most people who purchased a home and then were looking at a 6-figure loss way overpaid to begin with”
No, they paid what the market would bare at that time. The more expensive the home the bigger the opportunity for loss. If they would have told the seller it’s overpriced I’m not paying that much they would have been sent walking. And the house would have sold regardless to someone else.
“Just because for a while people were able to sell their homes for significantly more than they paid for them does not mean that they were operating in “a good economy”. ”
So in my case the value of my first home more than doubling in 5 years when the square footage never changed was a “bad economy”? Or when builders are putting up homes on lots in new developemnts because they can sell that quicker(most/all sold before they were even done being built) than an empty lot that is not a “good economy”? If the economy wasn’t good, where were all these people getting all this money to buy these homes?
And the people who once paid a year’s wages for a tulip bulb or a share of the South Sea Company were just paying what the market would bear too, I imagine.
They exactly overpaid. That’s what buying into an obvious bubble is.
Losing your shirt is exactly what comes next.
Really? You wonder where people got the money?
They either sold their own overinflated homes to some other sucker and took the proceeds to become the next sucker or they used one of the various products the mortgage industry was pushing at the time – No-doc loans, Negative ARM loans etc. That is what crashed the economy when it came time to pay the loans and the borrowers hadn’t read or understood the fine print.
It’s pretty much a pyramid scheme, the bottom supports the top until you run out of people at the bottom. The people who won are the ones that were smart or lucky enough to get out, take their cash and (this is the key) move away to someplace with maybe the same bubble going but lower price levels for equivalent properties. Just like Vegas baby! – You gotta know when to leave the table.
If enough people tell a seller a home is overpriced the price WILL come down, just like today. Just because someone paid the price down not mean it was realistically worth it. The guy who paid $20k over sticker for a Camaro the first week it came out looked cool for a week or two, but now looks like a moron without any financial sense. Similar concept.
The fact that your house doubled in value in five years is not at all indicative of a good economy. Did US GDP double in those same five years, did the average salary double? Did inflation double? No, all of which indicates that the fundamentals were off, i.e. not a good economy in regard to the housing industry. Did you expect the home to double again in value in the next five years? How long could this go on before you ran out of people with the income to support a purchase at that level?
GM is gonna need a channelectomy after this pre-election stuffing.
“They exactly overpaid. That’s what buying into an obvious bubble is.”
If you need a house, you need a house. You pay what the market dictates. It’s that simple. People don’t have the option of not buying a home, like you would with the newest and latest I-thing from Apple. Renting for most families would not have been a realistic option.
Of course renting is always an option and often the smart thing to do. Many people (and families) did just that thinking the prices were unsustainable. Many of them then bought in when the market tanked and now look pretty smart. Not everyone in this country CAN or wants to buy a house, people rent all over the place.
People who paid what the market dictated either:
A) WANTED a house and were willing to pay what it took or
B) Were not concerned with overpaying or
C) Made a bad bet and lost out which ended up dragging lots of others down at the same time.
Not many of them NEEDED a house and were willing to pay what it took to BUY that house. That doesn’t make much sense.
Depends on the housing market. A lot of houses/townhomes in DC want 1 month deposit, first and last months rent up front; 3 months rent before you get your keys. Plus restrictions like no pets, no smoking,no wallpaper, no painting and you pay the HOA. Full disclosure, I rent and I’ve moved 3 times in 5 years. Chasing my job.