GM, Ford, Toyota, Honda...Who will sell you your next car?

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Comments

  • gagricegagrice Member Posts: 31,450
    they still haven't forget the one that makes them what they are today - The LS.

    I understand your loyalty. The buying public does not share your enthusiasm. Both the GS430 and LS430 are way off in sales this year. Mercedes is making a nice comeback. The flagship "S" class is outselling the LS430 2 to 1. The "E" Class is outselling the GS Lexus. If it were not for the RX series SUVs they would not have many vehicles selling on the plus side so far this year. IMO they lost what they once had, great looking cars, that were a cut above the competition. If I want a fast car I will buy a Porsche Carrera not a Lexus. If you are looking for a street racer, get a Mitsubishi. They got a 4 banger that will out run the IS350.
  • nvbankernvbanker Member Posts: 7,239
    I see where you're coming from - the S-Class is lots better looking, inside & out than the LS-430, IMO. And the S-500 is what I had on order, when I switched to the LS. Reason? Not looks, it was dependability. The S-Class I test drove for a week, had 12 things that needed repairs right out the door under warranty. The Lexus has not had 12 things repaired on it ever! It spooked me, I'm frankly afraid of the S-class, but would really like one. I just can't afford down time. Plus, the dealer here is known for horrible customer service after the sale. The opposite is true for Lexus. They can't do enough for you.
  • gagricegagrice Member Posts: 31,450
    The dealer and experience is a big part of buying a car. Our local Lexus dealer leaves a lot to be desired. I cannot say I was thrilled with the MB dealer when I went to look at a couple cars. Not much out there gets me real enthused about a new car. I don't like the real low sloping front and back on most of the new cars. Visibility is less than great on many of them. We have more vehicles than two people really need anyway.

    PS
    I could live with the LS430 it is a nice car.
  • nvbankernvbanker Member Posts: 7,239
    "I could live with the LS430 it is a nice car."

    And, living with it is what I do. I'm in like with the LS, but not in love with it. Very competent and reliable car though. Just not beautiful, and not exciting.
  • m1miatam1miata Member Posts: 4,551
    I think would wait until Mercedes can prove that I will be spending more time on the road than in the shop. Sorry, but my Corolla I once owned sound better than waiting around the repair shop every few weeks to get another issue taken care of. I like to actually drive my cars. BTW, the fit and finish on the Corolla was perfect... near perfect. Nice and quiet on the road, though you bobble a bit in the wind, and it is little, let's say smallish inside. Ahhhh, but at least it was always on the road. A couple little work days over say seven years time. Now that is luxury!

    Test drove a new Mustang. The interior is nothing close to as good as the '98 Corolla. Not many choices in coupes under $22K these days. May buy another sedan some day. If I ever part with more money, I guess I will look at the CTS, new and used. BMW are of high quality, but I am not sure I am ready to pay the price of maintaining one for the long haul. I hear the Altima, Mazda6 and Milan are fun or at least quick, with a V6. After owning a Miata, I would like RWD again, but will pass on the Chrysler 300. Something I could hand my elbow out of would be nice. One without the too tall doors. Maybe I should get a classic of the 90's :D Well OK classic it may not be. Something of that era that was a great solid car, with larger windows, no throttle-by-wire and no electric steering assist. I don't know if others will agree with me on this, but I liked the looks of the Nissan 300Z design just before the latest 350Z, I think it was up to 1995? But then again, I like the '92 Preludes, and I owned a '91 Stealth. Everyone has their thing. I loved how the Stealth was low and wide. No big butt in the air. But it was indeed a Mitsubishi, and I think the days are numbered for those dealerships. Parts may become rare and expensive. Actually, they were expensive in the 90's too. Really like the Mercedes SLK, but don't have near the wealth to afford one new. They have great resale value, so even used they seem expensive. I think they now have the best reliability rating within the Mercedes line-up of cars. I like the looks, the top, the handling and most everything about that car.
    -Loren
  • lemkolemko Member Posts: 15,261
    Oh, I'd be furious if I bought a Lexus or Mercedes and the dealer treated me like crap afterwards. When I buy a luxury car, I expect to be treated a little better than the guy with a 490 credit score who bought a stripper Kia on an 84 month note.

    Lexus LS430 was my 1st runner-up when I last went car shopping, but the crown went to a Cadillac Seville STS. Overall, I'm quite happy with the car.

    Somebody mentioned they had a 84K mile 1990 Lexus LS400? Shoot, keep the car and save your money. That car has a lot of life left in it.
  • gagricegagrice Member Posts: 31,450
    Just not beautiful, and not exciting.

    Exactly, a fine built car I am sure. If I did a lot of road traveling I would put it on the list. I would just as soon fly to where I am going and rent, as to drive cross country.
  • gagricegagrice Member Posts: 31,450
    84K mile 1990 Lexus LS400?

    Hard to believe isn't it. My wife bought it new before I came on the scene. She only had MB and Porsches prior. Never made a payment in her life. No, not rich, just worked and saved. Just very frugal with money. Took the bus till she could buy a MB cash in the 1960s.
  • louisweilouiswei Member Posts: 3,715
    The flagship "S" class is outselling the LS430 2 to 1

    Uh...it's because the S-class is an all new design but the all-new LS won't be for sell until October this year.

    If I want a fast car I will buy a Porsche Carrera not a Lexus

    If I am as rich as you are I would buy a Prosche Carrera as my weekend car but the reality is...I am not. Also, Porschea Carrera doesn't offer the same level of luxury as the new IS. I bought the IS because it's a good balance between performance and luxury.

    If you are looking for a street racer, get a Mitsubishi. They got a 4 banger that will out run the IS350

    First of all, I am not looking for a street racer. I was looking for an entry-level luxury sports sedan and my options were: IS350, 3-series, Infiniti G and Acura TL. I choose the IS350 because like I said earlier it balances performance and luxury the best among the segment IMO and that's why I choose the IS.

    Also, please point me to a naturally aspirated 4 banger Mitsubishi that can put out over 300 HP and over 270 lb-ft of torque. I would love to know.

    BTW, I was never a loyal Lexus customer, this is the first time I purchase a Lexus car. I was always a Honda/Acura fan and always will be but the new GS, IS and even the LS changed my view of Lexus. If Lexus can keep up what they are doing now they'll have my business for a very long time (unless Acura decides to go RWD and upgrades its interior up a notch).
  • snakeweaselsnakeweasel Member Posts: 19,592
    Hard to believe isn't it.

    No I know a few people that only put a few thousand miles a year on a car, My mom was lucky to put 5K a year on hers. My Caddy would likely be like that too as I am lucky to put 100 miles on it a week.

    A co-worker has a 89 Grand Marque with about 55K on it. They bought it about two years ago and it had only 22K on the odometer.

    The problem is not the mileage but the age, time will do a number to a car. A 16 year old car with 84K on it is not the same as a 6 year old car with 84K on it.

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • lemkolemko Member Posts: 15,261
    How about a 18 year-old car with 84K on it like my Park Ave? I do drive it regularly and everything still works.
  • snakeweaselsnakeweasel Member Posts: 19,592
    Same thing, you will be more prone to things going wrong because of the age, not the mileage.

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • andre1969andre1969 Member Posts: 26,038
    that as long as you drive the car regularly, just to keep things lubricated, you might not be too bad off. For instance, if you put 50,000 miles on a car a little at a time over 15 years, that would probably be better than, say, a car where 40,000 miles got put on all in the first year or two and then the remaining 10K got put on in the remaining 8 or 9.

    But you're still going to run into old age type of stuff. My '76 Lemans only has about 77,000 miles on it, but it also had a lot of work done to it before I bought it. And I've had it checked out by my mechanic to keep on top of things. For the most part it seems fine, but there are little annoyances like the air conditioner not working, the radio recently stopped working too, the plastic part of the dash that's between the windshield and the padded part is warped, some of the interior parts are fading at different rates, and to slightly different hues than other parts, and so forth.

    My '79 New Yorker has about 90,000 miles on it, and like the LeMans, mechanically it's fine. But it does drop just a bit of oil here and there, the air conditioner doesn't work on it either, some of the interior plastic is breaking, some parts that were originally glued on are coming loose (yay Chrysler. :blush: ) I'd still trust it on a cross-country trip, although there's probably a greater chance that it would break down than on my 2000 Intrepid, which has 28,000 more miles on it, but is also 21 years younger! Plus, the fuel economy would kill me!

    I think newer cars, such as from the 70's, 80's, and newer, will be even more prone to things breaking as they age than 60's and older cars, because of a greater use of plastics, electronics, lighter components, etc.
  • nvbankernvbanker Member Posts: 7,239
    "The problem is not the mileage but the age, time will do a number to a car. A 16 year old car with 84K on it is not the same as a 6 year old car with 84K on it."

    This is true indeed - but it's usually not mechanical stuff as much as bushings, electrical componentry, switches, gagetry, lights.

    However - Lexus in the 90's at least, had a disciplin of "anti-aging" goin on, where they used rigoursly tested materials that would withstand the elements the best. Therefore, your Lexus on average will 'age better' than most cars. MB does the same. Ergo - buying an old Lexus or MB shouldn't be as big a pain in the rear as buying an old Cadillac.
  • lemkolemko Member Posts: 15,261
    ...that the environment in which a car is parked/stored would also be a factor. A car sitting outside will be in much worse shape than a car stored in a hermetically sealed garage.
  • fintailfintail Member Posts: 58,498
    I've seen many an early 90s Lexus with a well-decomposed leather interior. I don't think they got it right til the mid 90s.
  • nvbankernvbanker Member Posts: 7,239
    Really! I haven't seen that, and interiors are particularly adversely affected by the heat here in the desert.

    I have noticed however, that even a Mercedes, parked in the sun for 25 years here, showed no signs of interior deterioration whatsoever - very impressive.
  • fintailfintail Member Posts: 58,498
    Maybe it's the damp here. Especially on early SC and LS cars, the leather seems to split and disintegrate. Of course, I am sure the leather has never been maintained.

    MB leather will do the same thing, it cracks after some time, but longer than those early Lexus.

    The MB vinyl ("MB-Tex") lasts forever, and rarely falls apart. I've seen junkyard cars or rusted out hulk parts cars with pristine seats.
  • nvbankernvbanker Member Posts: 7,239
    Yeah people getting into the car wet from rain or snow would be harder on the leather than the heat probably.

    The 20+ year old cars I've spoken about all had the pleather (MB-Tex) and it's as durable as sheet metal, it seems....
  • fintailfintail Member Posts: 58,498
    A coworker used to have a ca. 1991 Acura Legend, that was originally from Alaska. It was pristine on the outside, and had something like 50K on it. But the leather was literally falling apart, driver and passenger seats especially. I think extremes can do it. I rarely see a pre-1994 Lexus with a really immaculate original interior around here.

    MB-Tex is the best interior material ever, IMO. It does a passable leather impression, and it is tough as nails. The normal leather in modern cars holds up fine from what I have seen...my 126 had 182K miles on it, and the only wear was the slightest hint on the drivers seat. The C43, which is now 8 years old, looks as new in the back and passenger seats, with barely the slightest creasing on the bolsters of the drivers seat.

    I think these aspects help keep the brand image strong, even with other issues.
  • gagricegagrice Member Posts: 31,450
    If Lexus can keep up what they are doing now they'll have my business

    One gained, one lost. Lexus is even. To each his own. The IS just does not cut it for me in looks. I start there and move to other areas of want and need. I just don't care for the looks of most new vehicles. The new CLS500 is not attractive to me or my wife. Another one scratched off the list.
  • gagricegagrice Member Posts: 31,450
    I think heat and moisture are a bigger enemy to leather. A dry heat will not do the damage that high humidity can cause. With my wife's being 20 miles from downtown San Diego always garaged, the leather is very nice. No smoke or children makes a difference also. Always hand washed is a plus. The climate control is still great and she has never had the AC serviced. Lexus built this car right. After the initial hassle with the suspension that is.
  • jimlockeyjimlockey Member Posts: 265
    Looks like we will have to wait until 2008 and the new diesels.
  • louisweilouiswei Member Posts: 3,715
    The IS just does not cut it for me in looks

    Uh...I don't think it's Lexus' intention to attract customers from your age group with the IS. They have the LS and LX for that purpose.
  • logic1logic1 Member Posts: 2,433
    I am disappointed Toy dropped the straight six. From a business perspective, it makes sense, as Toy does not appear to use the straigt six elsewhere. From a fun to drive perspective, appears one more competitor has dropped the quest to overcome the great BMW sixes.
  • gagricegagrice Member Posts: 31,450
    To sully a nameplate just to attract a different demographic makes little sense to me. The car belongs in the Toyota showrooms along side that FJ Cruiser thing. I always felt the ES cheapened the line also. Cadillac went through the same phase and survived. Just getting old I guess.
  • nvbankernvbanker Member Posts: 7,239
    Hey, GM makes a straight 6 and a straight 5 - unfortunately, they only put it in their trucks.
  • louisweilouiswei Member Posts: 3,715
    Like I said earlier Lexus has to compete with BMW, Acura, Infiniti so they have to have a product to compete in the entry-level luxury sports sedan segment. Put the IS in the Toyota lineup just won't cut it because Toyota is not a "luxury" brand. BTW, I know the IS (or maybe even the ES) looks "tiny" to you but have you actually check out the car in person? If not let me tell ya...a loaded IS is going to cost ya about 45,000 USD. I don't know about you but to me an entry level car costs over 40,000 USD is not cheapening any brand (well, unless we are talking about Ferrari, Lambo or Austin Martin).
  • louisweilouiswei Member Posts: 3,715
    Well, the inline six is good but it has its limitations. Look at BMW, in order to catch up with the IS350 in this horsepower war they are forced to drop 2 low pressure turbos into the 3.0 inline 6 in order to boost the HP to 300. This may not be a big deal to you but to me it looks like BMW has reach the peak of the inline 6 IMO. Unless BMW is willing to drop its "naturally-aspirated" heritage and start dropping turbos into their 6 bangers they probably will be forced to develop a V6 real soon (if they do I'll bet that's going to be one heck of an engine). If not, they can always replace the I6 with the current V8 they have in stock but at least to me it's just kind of funny to see a non-M 3-series with a V8.
  • gagricegagrice Member Posts: 31,450
    Checked out the IS350. The car we saw was an IS300 a very funky little hatchback. It really turned us off. The new IS350 is not bad looking, a definite improvement on the earlier model.
  • louisweilouiswei Member Posts: 3,715
    I agree with ya on the IS300 (especially the hatchback). In case you don't know, the old IS300 wears a Toyota badge under the name of Altezza (not sure about the spelling) in Japan. Because Lexus needed a car to compete with the 3-series they brought it over to the US and gave it a Lexus and it became the 1st generation IS.
  • gagricegagrice Member Posts: 31,450
    I think this is the first year that Toyota has tried to sell their Lexus in Japan. BMW dominates the Japanese luxury market.
  • louisweilouiswei Member Posts: 3,715
    Yes, Lexus still has a long way to go to catch up with BMW/MB/Audi in world-wide sell. Currently only in 2 countries that lexus is the leading luxury brand: US and Taiwan.
  • lemkolemko Member Posts: 15,261
    ...the back seat is VERY CRAMPED! The IS is called the Toyota Altezza in Japan.
  • andre1969andre1969 Member Posts: 26,038
    is a great looking little car, but like Lemko said, for all intents and purposes it's a subcompact. A 2-seater with a leather-clad package shelf in back. But if that's all you need, it should be a fine car, and really that's all the BMW 3-series is, anyway. I think the IS can get pricey fast though, once you start adding options.

    I thought the old IS300 looked an awful lot like a tricked Civic, but it did grow on me after awhile.
  • logic1logic1 Member Posts: 2,433
    Hey, GM makes a straight 6 and a straight 5 - unfortunately, they only put it in their trucks.

    Yes. And it is too bad, IMO.
  • logic1logic1 Member Posts: 2,433
    And the I6 does compromise occupant space as well.

    The engine has been such a thrill for drivers though. The acceleration and torque.

    Personally, I would just as soon BMW continue to perfect the engine, as well as work on things like hydrogen fueled ICE technology, than to put so much effort on the HP wars.

    The market appears to be HP insatiable, so some of your predictions may be closer to what will happen.
  • louisweilouiswei Member Posts: 3,715
    Not anymore...The 1st Gen IS is called Altezza in Japan with the Toyota badge but since Lexus was introduced in Japan this year the new IS wears the Lexus badge.
  • bumpybumpy Member Posts: 4,425
    I liked the IS300 except for the extra tailights on the trunk lid. I wouldn't mind picking up a used one except that they're about 500 pounds too heavy and it's next to impossible to find one with a stick. I think the IS250/350 is hideous.
  • louisweilouiswei Member Posts: 3,715
    Not hideous if you are the one behind the wheel. ;)
  • bumpybumpy Member Posts: 4,425
    The interior is okay, but I like the old one better, even the quirky gauges.
  • louisweilouiswei Member Posts: 3,715
    The old interior is actually pretty nice, one of my friend has an IS300 so I know that the quality is also pretty good as well. Unfortunately the old interior style is too "boy-racer" which is against Lexus' image.

    Also, I wasn't talking about IS's interior earlier, I was refeering to its 306HP and 277 lb-ft of torque.
  • nvbankernvbanker Member Posts: 7,239
    May auto sales

    June 2, 2006

    U.S. light-vehicles sales totals, individual automaker results and market share for May compared to May 2005:
    MAY 2004
    Maker volume % change
    from 2005 % mkt
    share YTD
    volume % change
    from 2005 YTD %
    mkt share

    GM 338,411 -12.5% 22.7% 1,628,524 -8.0% 23.7%
    Ford 277,157 -2.0% 18.6% 1,274,895 -3.5% 18.5%
    Toyota 235,708 17.0% 15.8% 1,000,524 8.8% 14.6%
    DaimlerChrysler 212,912 -8.4% 14.3% 1,037,883 -1.0% 15.1%
    Honda 141,810 16.1% 9.5% 614,778 8.6% 8.9%
    Nissan 86,667 -7.3% 5.8% 436,614 -3.0% 6.4%
    Hyundai 42,514 5.2% 2.9% 189,527 4.5% 2.8%
    Volkswagen 29,652 28.5% 2.0% 130,060 18.7% 1.9%
    BMW 28,390 5.4% 1.9% 129,661 9.9% 1.9%
    Mazda 27,321 2.5% 1.8% 116,977 3.6% 1.7%
    Kia 26,494 3.9% 1.8% 119,134 2.7% 1.7%
    Subaru 16,406 13.3% 1.1% 77,546 2.9% 1.1%
    Mitsubishi 11,821 3.9% 0.8% 48,357 -12.3% 0.7%
    Suzuki 10,135 35.9% 0.7% 47,443 37.3% 0.7%
    Porsche 3,272 -0.6% 0.2% 15,730 15.9% 0.2%
    Isuzu 638 -47.7% 0.0% 3,973 -37.0% 0.1%
    Maserati 219 13.5% 0.0% 890 25.7% 0.0%
    Ferrari 137 10.5% 0.0% 568 20.3% 0.0%
    TOTAL 1,489,664 -0.7% 100.0% 6,873,084 -0.4% 100.0%

    GM includes Buick, Cadillac, Chevrolet, GMC, Hummer, Oldsmobile, Pontiac, Saab and Saturn. Ford includes Lincoln, Mercury, Volvo, Jaguar, Land Rover and Aston Martin. DaimlerChrysler includes Chrysler, Dodge, Jeep, Mercedes and Maybach. Volkswagen includes Audi and Bentley. BMW includes Mini and Rolls-Royce. Toyota includes Lexus and Scion. Honda includes Acura. Nissan includes Infiniti.

    Figures are not adjusted for selling days.

    Source: Autodata Corp.
  • wvgasguywvgasguy Member Posts: 1,405
    Road and Track in comparing the Lexus GS450h to a BMW550 just couldn't come to call the Lexus a sports sedan. Granted it has a softer ride and didn't handle as good as the BMW BUT (and I left my magazine at work) the Lexus does 0-60 in 5.3 seconds, had a 0.80+g on the skidpad and did the salom in 60+mph. OK it's no BMW550, but in Car & Driver they show the specs on a 68 Vette with the 427 that did 0.65 on a skid pad and 0-60 in the same 5.3 seconds. I'm guessing you'd be lucky to get 10mpg with the Vette and probably need jet fuel to keep from knocking. The Lexus does this with a V6 and two electric motors and probably gets 25mpg.

    OK, so it's not a sports sedan, can we call it a musle car?
  • irnmdnirnmdn Member Posts: 245
    OK, so it's not a sports sedan, can we call it a musle car?
    NO, it is missing pushrod V8 and live axle at the rear, not to mention half in gaps between body panels.
  • louisweilouiswei Member Posts: 3,715
    They can call it whatever they want, the performance specs will speak for itself.
  • nvbankernvbanker Member Posts: 7,239
    Lexus has an image to break before people will think of them as "sporty". And I own one, love it for what it is, dead-bang dependable, extremely quiet, comfy, and stately. Sporty, or great looking don't come to mind.....
    The GS is supposed to be sportier, and it is, but it's not THAT sporty.....
  • explorerx4explorerx4 Member Posts: 20,785
    swap the tires on the 'lex and the 'vette and run the tests again. ;)
    2024 Ford F-150 STX, 2023 Ford Explorer ST, 91 Mustang GT vert
  • nvbankernvbanker Member Posts: 7,239
    A LOOK AT THE BOOKS: How GM juggled millions GM's road may get rougher

    June 4, 2006

    BY JENNIFER DIXON

    FREE PRESS STAFF WRITER

    A quick look at the case

    • Virtually all of GM's accounting errors worked in its favor, which industry experts say suggests a pattern that would concern regulators.

    • Some of GM's methods were similar to Delphi Corp.'s troubled practices.

    • GM says it has tightened its accounting to avoid future problems.

    5 key players in accounting case

    Rick Wagoner, General Motors Corp. chairman and chief executive. He said GM's accounting errors were made by employees who either did not know the rules or misinterpreted them.

    John Devine, GM's chief financial officer until this year. He told Wall Street analysts that GM did not accept rebates from suppliers, a declaration seized upon by critics.

    Peter Bible, GM's chief accounting officer. His resignation in May came two months after GM disclosed a series of accounting errors.

    J.T. Battenberg III, Delphi Corp.'s founding chairman and chief executive officer. He announced his retirement days before Delphi revealed a slew of accounting irregularities.

    Alan Dawes, Delphi's chief financial officer. He resigned after the audit committee of Delphi's board lost confidence in him.

    Following GM's latest troubles

    Oct. 19, 2004: General Motors Corp. says it received a subpoena from the Securities and Exchange Commission seeking records on its pension and retiree health plans.

    March 4, 2005: Delphi Corp. concedes that it made a series of accounting irregularities and says it's examining its accounting for $237 million in cash payments made to GM and $85 million in credits received from GM.

    Oct. 27, 2005: GM says it received SEC subpoenas related to its financial reporting for deals with Delphi, supplier credits, and any obligations it has to fund pension and other retirement costs for Delphi workers. GM said its finance arm, GMAC, received subpoenas from the SEC and a federal grand jury relating to industry-wide investigations of the insurance business.

    Nov. 9, 2005: GM says an internal investigation of its accounting for payments -- or credits -- from suppliers finds an error that caused it to overstate its 2001 income.

    March 16, 2006: GM concedes it made additional accounting errors.

    March 28, 2006: GM says it has received an SEC subpoena in connection with an investigation of its dealings in precious metals and a federal grand jury subpoena regarding supplier credits.
    One morning in March last year, General Motors executives conducted a conference call with Wall Street analysts to lay out some gloomy news: Shareholders could expect first-quarter losses and lower-than-expected earnings to follow.

    When it was his turn, Prudential analyst Michael Bruynesteyn raised a delicate question. He asked if GM had the same sort of accounting problems that were haunting Delphi Corp.

    GM's former parts unit had improperly recorded cash payments, known as rebates, from suppliers.

    "Our policy is no rebates from suppliers," shot back John Devine, GM's chief financial officer. He added that the automaker "had been very clear with our suppliers that we don't do business that way.

    "We think our accounting is very acceptable."

    But in fact, GM had improperly recorded rebates. It later admitted that its accounting practices led GM to inflate its 2001 income by 42% -- and by lesser amounts in 2000, 2002 and 2004, errors GM attributes to honest mistakes.

    GM's books are now under investigation by federal regulators and under fire from some GM investors, who claim in lawsuits that they were misled. The investigations come at a sensitive time for GM as it seeks to bolster shareholder confidence and turn a profit in North America.

    'A great deal of suspicion'

    Federal securities records and court filings reviewed by the Free Press show a string of accounting errors that consistently favored the company and offered investors a rosier outlook than actually existed. While GM is not accused of any crimes, experts warn that if GM is found to have intentionally misled investors, it might face legal problems and costly sanctions that could devastate the automaker.

    Some industry experts said they are disturbed by what they already know. Most troubling, they say, is that nearly every error GM has acknowledged helped to improve its financial picture.

    "The evidence is there was a string of errors, all going in one direction, giving a more positive light to GM's results," said Charles Mulford, an accounting professor at the Georgia Institute of Technology who has studied accounting at GM and other large companies. "Simple, honest errors go both ways. Investors were misled, in my view."

    GM said the errors were nothing more than a series of mistakes and must be viewed in the context of a company that had $193 billion in revenue last year.

    Peter Henning, a Wayne State University law professor who specializes in white-collar crime, sees reason for concern. When errors fall uniformly in the company's favor, he said, "that starts to look like a plan; that's not a series of accidents. That would generate a great deal of suspicion on the part of the government."

    Jerry Dubrowski, a GM spokesman, did not directly address why the errors tended to favor GM.

    "There's no question that the accounting errors were embarrassing to GM, that they hurt our reputation or damaged our reputation with investors," he said. "We are working very hard to restore that reputation.

    "Our decision to correct these mistakes was not at all guided by whether they were in GM's favor or not," he said. "It was to get the correct accounting."

    GM's defense was supported by David Cole, chairman of the Center for Automotive Research, a nonprofit in Ann Arbor that studies the auto industry.

    The bigger, more troubling picture

    Van Conway, a corporate-turnaround specialist based in Birmingham, said whatever accounting problems existed, they pale compared with GM's larger problem: survival.

    "If the company doesn't solve its declining market share, how they account for a rebate really isn't going to matter," he said.

    Dubrowski said GM has tightened accounting controls and changed how it records supplier credits. The company also has brought in AlixPartners, a firm known for advising troubled companies such as Kmart, WorldCom and Dana Corp., to help GM with a range of accounting matters.

    Last month Peter Bible, GM's chief accounting officer, abruptly resigned and controller Paul W. Schmidt said he was retiring.

    Since October 2004, GM's accounting has come under scrutiny by two federal grand juries and the Securities and Exchange Commission, which has issued six subpoenas seeking records -- including records on rebates and price adjustments GM received from suppliers and its dealings with Delphi.

    Sued by investors

    GM is accused of
  • nvbankernvbanker Member Posts: 7,239
    A LOOK AT THE BOOKS: How GM juggled millions GM's road may get rougher

    A quick look at the case

    • Virtually all of GM's accounting errors worked in its favor, which industry experts say suggests a pattern that would concern regulators.

    • Some of GM's methods were similar to Delphi Corp.'s troubled practices.

    • GM says it has tightened its accounting to avoid future problems.

    5 key players in accounting case

    Rick Wagoner, General Motors Corp. chairman and chief executive. He said GM's accounting errors were made by employees who either did not know the rules or misinterpreted them.

    John Devine, GM's chief financial officer until this year. He told Wall Street analysts that GM did not accept rebates from suppliers, a declaration seized upon by critics.

    Peter Bible, GM's chief accounting officer. His resignation in May came two months after GM disclosed a series of accounting errors.

    J.T. Battenberg III, Delphi Corp.'s founding chairman and chief executive officer. He announced his retirement days before Delphi revealed a slew of accounting irregularities.

    Alan Dawes, Delphi's chief financial officer. He resigned after the audit committee of Delphi's board lost confidence in him.

    Following GM's latest troubles

    Oct. 19, 2004: General Motors Corp. says it received a subpoena from the Securities and Exchange Commission seeking records on its pension and retiree health plans.

    March 4, 2005: Delphi Corp. concedes that it made a series of accounting irregularities and says it's examining its accounting for $237 million in cash payments made to GM and $85 million in credits received from GM.

    Oct. 27, 2005: GM says it received SEC subpoenas related to its financial reporting for deals with Delphi, supplier credits, and any obligations it has to fund pension and other retirement costs for Delphi workers. GM said its finance arm, GMAC, received subpoenas from the SEC and a federal grand jury relating to industry-wide investigations of the insurance business.

    Nov. 9, 2005: GM says an internal investigation of its accounting for payments -- or credits -- from suppliers finds an error that caused it to overstate its 2001 income.

    March 16, 2006: GM concedes it made additional accounting errors.

    March 28, 2006: GM says it has received an SEC subpoena in connection with an investigation of its dealings in precious metals and a federal grand jury subpoena regarding supplier credits.
    One morning in March last year, General Motors executives conducted a conference call with Wall Street analysts to lay out some gloomy news: Shareholders could expect first-quarter losses and lower-than-expected earnings to follow.

    When it was his turn, Prudential analyst Michael Bruynesteyn raised a delicate question. He asked if GM had the same sort of accounting problems that were haunting Delphi Corp.

    GM's former parts unit had improperly recorded cash payments, known as rebates, from suppliers.

    "Our policy is no rebates from suppliers," shot back John Devine, GM's chief financial officer. He added that the automaker "had been very clear with our suppliers that we don't do business that way.

    "We think our accounting is very acceptable."

    But in fact, GM had improperly recorded rebates. It later admitted that its accounting practices led GM to inflate its 2001 income by 42% -- and by lesser amounts in 2000, 2002 and 2004, errors GM attributes to honest mistakes.

    GM's books are now under investigation by federal regulators and under fire from some GM investors, who claim in lawsuits that they were misled. The investigations come at a sensitive time for GM as it seeks to bolster shareholder confidence and turn a profit in North America.

    'A great deal of suspicion'

    Federal securities records and court filings reviewed by the Free Press show a string of accounting errors that consistently favored the company and offered investors a rosier outlook than actually existed. While GM is not accused of any crimes, experts warn that if GM is found to have intentionally misled investors, it might face legal problems and costly sanctions that could devastate the automaker.

    Some industry experts said they are disturbed by what they already know. Most troubling, they say, is that nearly every error GM has acknowledged helped to improve its financial picture.

    "The evidence is there was a string of errors, all going in one direction, giving a more positive light to GM's results," said Charles Mulford, an accounting professor at the Georgia Institute of Technology who has studied accounting at GM and other large companies. "Simple, honest errors go both ways. Investors were misled, in my view."

    GM said the errors were nothing more than a series of mistakes and must be viewed in the context of a company that had $193 billion in revenue last year.

    Peter Henning, a Wayne State University law professor who specializes in white-collar crime, sees reason for concern. When errors fall uniformly in the company's favor, he said, "that starts to look like a plan; that's not a series of accidents. That would generate a great deal of suspicion on the part of the government."

    Jerry Dubrowski, a GM spokesman, did not directly address why the errors tended to favor GM.

    "There's no question that the accounting errors were embarrassing to GM, that they hurt our reputation or damaged our reputation with investors," he said. "We are working very hard to restore that reputation.

    "Our decision to correct these mistakes was not at all guided by whether they were in GM's favor or not," he said. "It was to get the correct accounting."

    GM's defense was supported by David Cole, chairman of the Center for Automotive Research, a nonprofit in Ann Arbor that studies the auto industry.

    The bigger, more troubling picture

    Van Conway, a corporate-turnaround specialist based in Birmingham, said whatever accounting problems existed, they pale compared with GM's larger problem: survival.

    "If the company doesn't solve its declining market share, how they account for a rebate really isn't going to matter," he said.

    Dubrowski said GM has tightened accounting controls and changed how it records supplier credits. The company also has brought in AlixPartners, a firm known for advising troubled companies such as Kmart, WorldCom and Dana Corp., to help GM with a range of accounting matters.

    Last month Peter Bible, GM's chief accounting officer, abruptly resigned and controller Paul W. Schmidt said he was retiring.

    Since October 2004, GM's accounting has come under scrutiny by two federal grand juries and the Securities and Exchange Commission, which has issued six subpoenas seeking records -- including records on rebates and price adjustments GM received from suppliers and its dealings with Delphi.

    Sued by investors

    GM is accused of fraud by lawyers representing investors from Mississippi to Germany. In the suits, which were consolidated in a New Y
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