VW is not #1. I just realized some of my mutual funds own shares in Ford.
So technically, since I am minority owner of both Ford and GM, I am number one.
Next year I aim to increase sales by 50%, so I plan to buy one share of Toyota stock. I will have to work very hard to build more cars acquire minority ownership.
Jokes aside, isn't this Old GM thinking? Acquire part ownership of brands like Saab, Isuzu, Suzuki, Subaru, etc. in order to spread their legacy costs across a higher volume of cars? Didn't work then, why would it work now?
Look at that Wuling van and tell me how, exactly, that fits in to GM's portfolio of automobiles? Maybe they want access to the dealer distribution network.
There is nothing that screams "Asian" more than a narrow van like that.
I wonder how it would do in frontal crash tests. Your legs are the crumple zone. Look how small they are:
Jokes aside, isn't this Old GM thinking? Acquire part ownership of brands like Saab, Isuzu, Suzuki, Subaru, etc. in order to spread their legacy costs across a higher volume of cars? Didn't work then, why would it work now?
To be fair, it's the only way to compete in China, and GM seems to be doing very well there.
After all of this going back and forth with GM and VW etc. I've been looking at GM's balance sheet. Two things stand out. Goodwill and inventory. Now I've been comparing GM to Ford as YTD, GM is only 12B ahead in sales (113b vs 101b) yet GM's inventory numbers are double Ford's and have been growing all year. GM's inventory is 15.2b as of the 3rd quarter 2011 vs. $7.2B and has remained steady for 2011
Then there is Goodwill. To me it's one of those "believe me it's real" numbers. But at $30b, it's a big number sitting on the balance sheet.
For all the good Ford has done the past few years, their balance sheet is still a mess. Just a ton of liabilities. Though they look good by not going bankrupt, they have little room for failure. Heck, as of last years annual report, Ford was basically upside down. 2011 has been very positive, but they certainly can't let off the gas.
GM isn't a whole lot better as of the last reported quarter, GM's net tangible assets were $4.3B (actually lower than Ford) take away $30b in goodwill then what do you have?
have your cake and eat it too. complain that new GM doesn't honor pre bk warranties and then also complain that GM can write off losses, even post bk losses.
You can see where Ford is spending the money, though. Look at all the new powertrains, in-car tech, fresh models, etc. Even marketing - kids are watching viral videos with Ken Block's Fiestas more every day.
Once they ditch the Ranger (if they haven't already) and the new Escape arrives, they'll won't really have a weak spot in their lineup.
You can see where Ford is spending the money, though. Look at all the new powertrains, in-car tech, fresh models, etc. Even marketing - kids are watching viral videos with Ken Block's Fiestas more every day.
True, if at the end of the day, Ford can't meet it's obligations, it won't be for lack of trying.
It's fairly obvious development at GM basically stopped while they were in the process of going bankrupt. Quite a few projects were cancelled or pushed back.
One thing which is on both GM and Ford's side is Toyota and Honda really aren't doing anything exceptional. For probably the first time in 30 years, when I look at the products between them, I prefer most of the GM, Ford's, and a few Chryslers.
Looking at GM's income statement. I think they are the first company that I've noticed that net income is actually higher than EBIT earnings.
Yes, if you're paycheck was being taxed like GM your net takehome (profit) would be the same as what you grossed, plus some other credits for having went bankrupt. So if you personally were treated like GM, and you made $100K, you might be putting $105K in your bank account. You're neighbor menawhile, someone like Ford or Toyota who made $100K, would be putting $60K in their bank account.
Then someone asks the group of you how much you banked (net profit) and GM can answer $105K and the others answer $60K.
As I said before, it would have been better for Ford not to have secured all that credit, and went BK in 2008-09 along with the other 2. Ford was doing the appropriate thing to maintain cash-flow under normal operations, was a good corporate citizen then, and thus got cutoff the welfare giveaway then. Instead Ford got the Pubic Relations consolation-prize.
As I said before, it would have been better for Ford not to have secured all that credit, and went BK in 2008-09 along with the other 2.
I think the Ford family is a big reason Ford did everything possible to avoid bankruptcy. IIRC, the Ford family owns all of the class B shares which keeps them in control of the BOD.
If not for the Ford family wanting to maintain ownership and control of the company, Ford probably would have filed along with GM, or at least accepted more government aid.
Instead Ford got the Pubic Relations consolation-prize.
Ford certainly did win with PR. I live in republican farm country, and I've talked to more than one farmer who has switched to a Ford from GM. Many are quick to point out they didn't want to buy from GM due to the bailout. I'm not saying every farmer feels that way, but I've heard it a lot.
That could be a big reason Ford has 50% of the HD pickup market. I've read more than one review claiming the 3/4 and 1 ton GM pickups score higher on their battery of tests vs the F250 and F350. But HD Fords are more than winning on the showroom floor.
The 1st major GAAP corporation that I went and looked at their quarterly report DOES subtract taxes before reporting their quarterly profit
As wrote in the previous post, the payroll tax is known to corporation whenever they pay their employees. So they can publish the quarterly profit after payroll tax. But it's impossible to publish profit after corporate income tax.
I own mutual funds that buy some GM stock, so I'm also a minority owner. That means I sold 10+ million cars last year.
Are you laughing at how VW counts their sales too?
In your logic, no vehicles sold in China should be counted by any foreign automakers because none of them own controlling stack? The largest auto market in the world should be ignored?
The tax $420 obviously is not income tax. It's too small to be payroll tax too. It could be miscellaneous tax or business license fees, etc.
I don't know what that is. Looks like a sample income statement for a small company that would use [non-permissible content removed] rather than an actual income statement of a publicly traded corporation.
Seems to me you are cherry-picking re: GM's great sales. Is it not true that GM is basically still in financially horrible shape? And competitively they appear to be improving from terminal to just pretty bad. An improvement, but nothing to be overly excited about. A long, long way to go. If the patient survives...
Are you laughing at how VW counts their sales too?
In your logic, no vehicles sold in China should be counted by any foreign automakers because none of them own controlling stack? The largest auto market in the world should be ignored?
You have a point, the whole thing is ridiculous. Just legitimately count what has sold and call it a day.
So they can publish the quarterly profit after payroll tax. But it's impossible to publish profit after corporate income tax.
I sure hope you're not going to say you have an MBA. And that you were taught how to read an Income Statement in a Finance class. Because that would just make worse your argument. I and dieselone have now shown you mutliple corporate (not a self-employed document, (ad) that you posted), showing that there is EBIT and then the federal government charges an income tax to the corporation. EBIT - income tax + any other misc. charges = net profit. Corporations report net profit, the media reports that. We have shown you that St. Louis won the 2011 World Series, but you keep arguing that the Yankees did.
You keep saying corporations don't know their income tax, but they make a fairly close estimate. They know what the government rate is and any deductions. http://www.qbalance.com/corporate_tax_rates_united_states.htm Based on that why couldn't some accountants calculate what the tax on EBIT is? and thus calculate net profit?
Corporations that have more than $500 in tax liability are usually required to pay estimated quarterly tax payments. Of course that would show up on a quarterly income statement.
Now back to cars.
I need some opinions. My BIL wants to sell an 06 Dodge Ram 2500 Quad Cab SLT diesel 2wd with 175k miles on it. I've been thinking about buying a used 3/4 ton truck and a car for a daily driver.
A few dealers have offered him about $8,500 for it. It's in good shape and they are almost all highway miles as he drives 60 miles each way to work. Opinions?
I think it should've been a Buick at that price point.
Even that would have made more sense. IMHO they wanted it to be a Chevy, hoping that the excitement of the new technology would make it a bigger seller than it has been so far. Problem is the price point. When the Prius second gen came out I believe it started only around $20K, only half the price of the Volt.
IMHO they wanted it to be a Chevy, hoping that the excitement of the new technology would make it a bigger seller than it has been so far. Problem is the price point. When the Prius second gen came out I believe it started only around $20K, only half the price of the Volt.
I doubt the Volt would be selling any better if it were a Buick or Cadillac. Honestly, I don't see a traditional Buick customer being an early adopter of an electric vehicle. And I don't see those who are early adopters wanting a Buick.
Buick is struggling to sell Regals, a car that is intended to bring in people who wouldn't normally buy a Buick.
In the end, the Volt being a Chevy probably makes the most sense to attract the widest range of people. I have been seeing more Volts on the road around here.
IMHO they wanted it to be a Chevy, hoping that the excitement of the new technology would make it a bigger seller than it has been so far. Problem is the price point. When the Prius second gen came out I believe it started only around $20K, only half the price of the Volt.
I doubt the Volt would be selling any better if it were a Buick or Cadillac. Honestly, I don't see a traditional Buick customer being an early adopter of an electric vehicle. And I don't see those who are early adopters wanting a Buick.
Buick is struggling to sell Regals, a car that is intended to bring in people who wouldn't normally buy a Buick.
In the end, the Volt being a Chevy probably makes the most sense to attract the widest range of people. I have been seeing more Volts on the road around here.
I think you are probably correct in your last sentence.
I think GM envisions selling tons of Volt-type vehicles, and the company wanted to start out of the gate appealing to the average consumer.... sort of like the appeal Henry Ford had with the Model T. Make it a "common man's" vehicle, at least in appearance, and then build upon the base unit with luxury models, like Buick and ultimately, Cadillac.... with more options, nicer interiors, etc.
Problem is, the Model T was far more affordable to the masses. If I'm thinking $40K +, I'm also thinking BMW or Lexus, even though I am probably the perfect candidate for something like the Volt, in my driving patterns... lots of trips less than 15-20 miles, and few long trips... and, an enclosed garage with 240V power readily available for charging.
Corporations report net profit, the media reports that.
GM reports EBIT in their annual report, which is widely quoted as net profit by the media.
Back to your statements: GM makes the most profit last year. 1) Because ... they don't have to pay the 35% corporate tax 2) somone want to remind me if their accounting has to be GAAP yet. I know they weren't for a while.
Please show me the proof of the following: 1) GM makes less EBIT than Toyota or Honda last year 2) Something wrong with GM's accounting
Ok. I don't know if you're going to think this is proof, but do you believe GM? It seems you do. So let's hear from GM in their own words: "The accompanying tables and charts for securities analysts include earnings before interest and taxes (EBIT), EBIT adjusted and Automotive free cash flow which are not prepared in accordance with Accounting Principles Generally Accepted in the United States of America (U.S. GAAP) and have not been audited or reviewed by GM’s independent auditors. EBIT, EBIT adjusted and Automotive free cash flow are considered non-GAAP financial measures."
So what do we glean fro this: 1) So GM's numbers are non-GAAP, at the time of this release. Exxon and other companies are almost always releasing GAAP numbers. 2) GM also states their non-GAAP numbers are not independently audited.
Let's see what else GM says. Looks like the lawyers stuck this in, in case Management "believe" - lot of confidence there ...
"While management believes that these non-GAAP financial measures provide useful information, they are not operating measures under U.S. GAAP and there are limitations associated with their use."
And does GM think these numbers are "completely" (subjective - 25%, 50%, 75%?) comparable to other companies. NO! Here's their words:
"GM’s calculation of these non-GAAP financial measures may not be completely comparable to similarly titled measures of other companies due to potential differences between companies in their method of calculation."
Because GM is non-GAAP meaning they may contain non-standard methods; while other companies that are public have to report using GAAP.
Now let's see what GM says about how useful these non-GAAP numbers are (which may include a lot of Goodwill as dieselone noted), versus the bottom-line of the Net Profit.
"As a result, the use of these non-GAAP financial measures has limitations and should not be considered in isolation from, or as a substitute for, other measures such as Net income or Net income attributable to common stockholders."
In summary, you are asking a non-applicable question - if there is something wrong with GM's accounting. If it's non-GAAP, the accounting is whatever rules the accountants applied to the base assets and liabilities of GM. It's like asking whether a batter got a hit ot an out, when they're still in the on-deck circle.
Hi kernick - I don't know if you have the answer to this question - but GM is out of BK and is a publicly traded company. How is it that they aren't using GAAP at this time? I would have thought that was a requirement for a public company, and that once out of BK they would have to do that.
So this really means that all of GM's financial numbers are at best, somewhat suspect relative to other companies that are following the stricter requirements of GAAP.
No I really don't know what the answer is to that GM-GAAP question. That report as you noted too comes while they are public again.
I think as my numerous posts here have shown, the GM government-run and government-recapitalization, along with all the stimuli, is a very complicated story. I believe most of the complication is intentional, to alleviate attention that a single large bailout would have drawn.
When I get some time though, I'll look for some stories on that particular aspect. I'm an engineer, with grad. courses in Finance and Accounting, but am not an expert on bankruptcy law, or what special provisions GM was given. A lot of "unusual" business arrangements were decreed during 2009.
I'm not sure what this excerpt is from - I'm assuming GM 3Q 10Q filing? Anyway, a couple of cautions. First, it is labled "supplemental" and GM did clearly disclose it isn't all GAAP or audited. That doesn't mean the entire 10Q is not GAAP. Second, I believe it is more a managerial analysis than a financial reporting document. The former if disclosed don't have to conform to GAAP. Third, foreign operations aren't US GAAP (have to conform to local laws, regulations and tax formats) and so they have to be interpreted and estimated when put into US GAAP documents. Finally, don't let GAAP and audited data lull you. There are many examples of unanticipated failures after fully audited GAAP documentation. Accounting can be art and estimation more than science. There is a fair amount of leeway and alternative methodology allowed under GAAP. Not saying there may not be any gov and corporate shenanigans from the BK, just that the issue may not be as critical as you first think.
I'm not sure what this excerpt is from - I'm assuming GM 3Q 10Q filing?
It's right in the Link address 3Q 2011; not 2010. If you open the link you will also see "2011" above the data. I wanted as current as I could find.
Second, I believe it is more a managerial analysis than a financial reporting document.
Yes. That is my point. At least until that point I can't find GM posting any GAAP financial documents. They are not necessarily equivalent to other GAAP reporting corporations. It could be close to GAAP or far-away.
There are many examples of unanticipated failures after fully audited GAAP documentation.
There are several types. You have the frauds like Enron, where illegalaties were carried out, put knowingly (lies) put into a GAAP document, and the SEC failed to investigate deep enough or ask the right questions. Then you have companies that are following GAAP and making an honest effort, but may find the value of the company has changed greatluy in 6 months or a year - say a company that owned retail mall space; or the value of old Kodak patents.
The difference here is GM fits in neither of these categories. GM is being supported with the financial and legal backing of the Treasury, the greater Executive branch (don't forget the old "auto Czar"). Remember GM's bailout was part of TARP, which could be likened to financial-marshal-law.
GM got the platinum version of that! Oh, don't want anyone to miss this gem: "Bankruptcy laws in this land are kind of criminal," says Frank Hurt, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. "The employees get a screwing and are last on the list of creditors. It's asinine and ridiculous, but that's what the law allows. The people who own the gold make the rules."
Are you laughing at how VW counts their sales too?
Yes, actually.
A true Joint Venture is when a car is co-developed with resources used on both sides.
GM (or anyone) buying minority ownership does not mean those should count as sales. GM announces those in their press release, and the media is just picking it up on the PRnewswire, but they are crying foul, and I agree.
Again, look at this picture. Is there any GM at all in this van? Zero.
The largest auto market in the world should be ignored?
No - those are Wuling sales, not GM sales. Wuling's van, R&D, distribution, everything. Wuling indeed report those sales as their own, as mentioned earlier.
My Point - to be clear - those sales are being counted twice!
I guess I'm not clear on why you were denied warranty service.
I've heard similar warranty horror stories from a guy that owned a GM truck at work.
They tried the "your warranty is expired because it is from the date of manufacture, not your date of purchase" argument and trick on him. He appealed to GM customer service/relations and got no where.
I tend to believe random people, as they are much more credible than a bankrupted and bailed out company.
'18 Porsche Macan Turbo, '16 Audi TTS, Wife's '19 VW Tiguan SEL 4-Motion
"NHTSA does not believe that Chevy Volts or other electric vehicles pose a greater risk of fire than gasoline-powered vehicles,". When did it become popular for scientists and engineers "to believe". Are they astrologers, or working with mathematics and physics? Belief vs. facts.
"The NHTSA said that "no discernible defect trend" exists and that the changes GM made should lessen the potential for problems."
I could have told them that before starting! How could there be a trend based on the few Volts that are on the road, and the much smaller population that have been in a serious accident! What's the next study? to see if there is a trend of - people driving around with aardvarks have more accidents than people driving around with dogs?
They tried the "your warranty is expired because it is from the date of manufacture, not your date of purchase" argument and trick on him. He appealed to GM customer service/relations and got no where.
This is complete B.S.
Take thirty seconds to look at any GM warranty book, now or then, and it plainly states from 'date put in service'.
2024 Chevrolet Corvette Stingray 2LT; 2019 Chevrolet Equinox LT; 2015 Chevrolet Cruze LS
to see if there is a trend of - people driving around with aardvarks have more accidents than people driving around with dogs?
OK... I think we've all crossed the line when we begin to slander the good name of aardvarks!
I agree with your assumption, though.... A couple of points on a graph do NOT make a trend.
Still, it wouldn't worry me to ride around in a Volt, but I might display a tad more concern parking it in my attached garage overnight, due to what may or may not be a potential fire hazard. IMO, we probably need a bit more "real world" experience and exposure to put this issue to bed.
Wasn't sudden "exploding into flames" a relatively recent problem with Ford... leaking cruise control/brake line sensors allowing brake fluid to drip on the hot exhaust manifold?
You know, you hear about warranty denials once in a while, but its very difficult to get any specifics.
My initial feeling is that, without complete information, I have a problem accepting valid warranty claims denial as actually happening.
For example, if someone shows up with a burned-out clutch, and its clear the car has been abused, warranty denial might be invoked with reasonable explanation.
I have read on the Nissan, Hyundai and Mini forums here on Edmunds about claims of warranty repairs refusal, but no one has clearly demonstrated (at least to me) anything close to a full explanation of why the repairs were denied.
Usually, its something like "My xxx broke, and the dealer refused to fix it, and the car only had 30K miles on it, and I've been driving cars like this for 40 years...".
It may indeed be happening, but I certainly have never had such an experience like it.
Saylors, and it was a loaner car with a rubber mat from the wrong model. Note there had been a previous complaint of pedal entrapment on that exact same car (!) to that dealer.
The suit against the dealer (Bob Barker Baker Lexus) is still pending.
Yeah, if anything, gas tanks are more volatile then the Volt's batteries ever will be.
I think the media over-reacted once again. The Volt is a hated target (just ask Cavuto or Limbaugh), just like the Prius was when it came out and had federal incentives on it. It's more about politics than the actual cars.
What bugs me is the dealers stopping orders. That shows a lack of loyalty to GM.
If there truly is a wait list, work on distribution so the cars get to the regions that want them.
They have an uphill image battle against he Cavutos of the media, and that's a shame.
Comments
Let me tell you, I am EXHAUSTED!
LOL!!!!
I don't think VW has made that claim, but I've seen some headlines in various media outlets that would make one believe that is a possibility.
So technically, since I am minority owner of both Ford and GM, I am number one.
Next year I aim to increase sales by 50%, so I plan to buy one share of Toyota stock. I will have to work very hard to
build more carsacquire minority ownership.Jokes aside, isn't this Old GM thinking? Acquire part ownership of brands like Saab, Isuzu, Suzuki, Subaru, etc. in order to spread their legacy costs across a higher volume of cars? Didn't work then, why would it work now?
Look at that Wuling van and tell me how, exactly, that fits in to GM's portfolio of automobiles? Maybe they want access to the dealer distribution network.
There is nothing that screams "Asian" more than a narrow van like that.
I wonder how it would do in frontal crash tests. Your legs are the crumple zone. Look how small they are:
http://www.youtube.com/watch?v=qwL3V67w8-8
To be fair, it's the only way to compete in China, and GM seems to be doing very well there.
After all of this going back and forth with GM and VW etc. I've been looking at GM's balance sheet. Two things stand out. Goodwill and inventory. Now I've been comparing GM to Ford as YTD, GM is only 12B ahead in sales (113b vs 101b) yet GM's inventory numbers are double Ford's and have been growing all year. GM's inventory is 15.2b as of the 3rd quarter 2011 vs. $7.2B and has remained steady for 2011
Then there is Goodwill. To me it's one of those "believe me it's real" numbers. But at $30b, it's a big number sitting on the balance sheet.
For all the good Ford has done the past few years, their balance sheet is still a mess. Just a ton of liabilities. Though they look good by not going bankrupt, they have little room for failure. Heck, as of last years annual report, Ford was basically upside down. 2011 has been very positive, but they certainly can't let off the gas.
GM isn't a whole lot better as of the last reported quarter, GM's net tangible assets were $4.3B (actually lower than Ford) take away $30b in goodwill then what do you have?
complain that new GM doesn't honor pre bk warranties and then also complain that GM can write off losses, even post bk losses.
cherry picked data abound when it comes to GM
Once they ditch the Ranger (if they haven't already) and the new Escape arrives, they'll won't really have a weak spot in their lineup.
Excluding Lincoln, of course.
True, if at the end of the day, Ford can't meet it's obligations, it won't be for lack of trying.
It's fairly obvious development at GM basically stopped while they were in the process of going bankrupt. Quite a few projects were cancelled or pushed back.
One thing which is on both GM and Ford's side is Toyota and Honda really aren't doing anything exceptional. For probably the first time in 30 years, when I look at the products between them, I prefer most of the GM, Ford's, and a few Chryslers.
Yes, if you're paycheck was being taxed like GM your net takehome (profit) would be the same as what you grossed, plus some other credits for having went bankrupt. So if you personally were treated like GM, and you made $100K, you might be putting $105K in your bank account. You're neighbor menawhile, someone like Ford or Toyota who made $100K, would be putting $60K in their bank account.
Then someone asks the group of you how much you banked (net profit) and GM can answer $105K and the others answer $60K.
As I said before, it would have been better for Ford not to have secured all that credit, and went BK in 2008-09 along with the other 2. Ford was doing the appropriate thing to maintain cash-flow under normal operations, was a good corporate citizen then, and thus got cutoff the welfare giveaway then. Instead Ford got the Pubic Relations consolation-prize.
I think the Ford family is a big reason Ford did everything possible to avoid bankruptcy. IIRC, the Ford family owns all of the class B shares which keeps them in control of the BOD.
If not for the Ford family wanting to maintain ownership and control of the company, Ford probably would have filed along with GM, or at least accepted more government aid.
Instead Ford got the Pubic Relations consolation-prize.
Ford certainly did win with PR. I live in republican farm country, and I've talked to more than one farmer who has switched to a Ford from GM. Many are quick to point out they didn't want to buy from GM due to the bailout. I'm not saying every farmer feels that way, but I've heard it a lot.
That could be a big reason Ford has 50% of the HD pickup market. I've read more than one review claiming the 3/4 and 1 ton GM pickups score higher on their battery of tests vs the F250 and F350. But HD Fords are more than winning on the showroom floor.
As wrote in the previous post, the payroll tax is known to corporation whenever they pay their employees. So they can publish the quarterly profit after payroll tax. But it's impossible to publish profit after corporate income tax.
Take a look at this income statement: Intuit
The tax $420 obviously is not income tax. It's too small to be payroll tax too. It could be miscellaneous tax or business license fees, etc.
Can you show me an income statement which includes income tax?
Are you laughing at how VW counts their sales too?
In your logic, no vehicles sold in China should be counted by any foreign automakers because none of them own controlling stack? The largest auto market in the world should be ignored?
The tax $420 obviously is not income tax. It's too small to be payroll tax too. It could be miscellaneous tax or business license fees, etc.
I don't know what that is. Looks like a sample income statement for a small company that would use [non-permissible content removed] rather than an actual income statement of a publicly traded corporation.
But here are a few examples.
apple
Berkshire
Conoco
All show income tax expenses on their quarterly income statement.
Granted it can be all over the place as far as tax liability with all of the various deductions, and credits, and business losses etc.
GE
As you can see, GE is all over the place, some quarters large income tax expense and others income tax is negative.
IF you look at GE's past two years, their tax liability is essentially zero as 2009 cancels out what was paid in 2010.
Seems to me you are cherry-picking re: GM's great sales. Is it not true that GM is basically still in financially horrible shape? And competitively they appear to be improving from terminal to just pretty bad. An improvement, but nothing to be overly excited about. A long, long way to go. If the patient survives...
In your logic, no vehicles sold in China should be counted by any foreign automakers because none of them own controlling stack? The largest auto market in the world should be ignored?
You have a point, the whole thing is ridiculous. Just legitimately count what has sold and call it a day.
LOL
Sorry, you never know where a topic will lead.
I sure hope you're not going to say you have an MBA. And that you were taught how to read an Income Statement in a Finance class. Because that would just make worse your argument. I and dieselone have now shown you mutliple corporate (not a self-employed document, (ad) that you posted), showing that there is EBIT and then the federal government charges an income tax to the corporation. EBIT - income tax + any other misc. charges = net profit. Corporations report net profit, the media reports that. We have shown you that St. Louis won the 2011 World Series, but you keep arguing that the Yankees did.
You keep saying corporations don't know their income tax, but they make a fairly close estimate. They know what the government rate is and any deductions. http://www.qbalance.com/corporate_tax_rates_united_states.htm Based on that why couldn't some accountants calculate what the tax on EBIT is? and thus calculate net profit?
Now back to cars.
I need some opinions. My BIL wants to sell an 06 Dodge Ram 2500 Quad Cab SLT diesel 2wd with 175k miles on it. I've been thinking about buying a used 3/4 ton truck and a car for a daily driver.
A few dealers have offered him about $8,500 for it. It's in good shape and they are almost all highway miles as he drives 60 miles each way to work. Opinions?
Even that would have made more sense. IMHO they wanted it to be a Chevy, hoping that the excitement of the new technology would make it a bigger seller than it has been so far. Problem is the price point. When the Prius second gen came out I believe it started only around $20K, only half the price of the Volt.
I doubt the Volt would be selling any better if it were a Buick or Cadillac.
Honestly, I don't see a traditional Buick customer being an early adopter of an electric vehicle. And I don't see those who are early adopters wanting a Buick.
Buick is struggling to sell Regals, a car that is intended to bring in people who wouldn't normally buy a Buick.
In the end, the Volt being a Chevy probably makes the most sense to attract the widest range of people. I have been seeing more Volts on the road around here.
I doubt the Volt would be selling any better if it were a Buick or Cadillac.
Honestly, I don't see a traditional Buick customer being an early adopter of an electric vehicle. And I don't see those who are early adopters wanting a Buick.
Buick is struggling to sell Regals, a car that is intended to bring in people who wouldn't normally buy a Buick.
In the end, the Volt being a Chevy probably makes the most sense to attract the widest range of people. I have been seeing more Volts on the road around here.
I think you are probably correct in your last sentence.
I think GM envisions selling tons of Volt-type vehicles, and the company wanted to start out of the gate appealing to the average consumer.... sort of like the appeal Henry Ford had with the Model T. Make it a "common man's" vehicle, at least in appearance, and then build upon the base unit with luxury models, like Buick and ultimately, Cadillac.... with more options, nicer interiors, etc.
Problem is, the Model T was far more affordable to the masses. If I'm thinking $40K +, I'm also thinking BMW or Lexus, even though I am probably the perfect candidate for something like the Volt, in my driving patterns... lots of trips less than 15-20 miles, and few long trips... and, an enclosed garage with 240V power readily available for charging.
GM reports EBIT in their annual report, which is widely quoted as net profit by the media.
Back to your statements:
GM makes the most profit last year.
1) Because ... they don't have to pay the 35% corporate tax
2) somone want to remind me if their accounting has to be GAAP yet. I know they weren't for a while.
Please show me the proof of the following:
1) GM makes less EBIT than Toyota or Honda last year
2) Something wrong with GM's accounting
Regards,
OW
you still are owned by the Governmentare now a joint venture between the U.S. and Chinese Governments.:surprise:
Ok. I don't know if you're going to think this is proof, but do you believe GM? It seems you do. So let's hear from GM in their own words: "The accompanying tables and charts for securities analysts include earnings before interest and taxes (EBIT), EBIT adjusted and
Automotive free cash flow which are not prepared in accordance with Accounting Principles Generally Accepted in the United States
of America (U.S. GAAP) and have not been audited or reviewed by GM’s independent auditors. EBIT, EBIT adjusted and
Automotive free cash flow are considered non-GAAP financial measures."
So what do we glean fro this: 1) So GM's numbers are non-GAAP, at the time of this release. Exxon and other companies are almost always releasing GAAP numbers. 2) GM also states their non-GAAP numbers are not independently audited.
Let's see what else GM says. Looks like the lawyers stuck this in, in case Management "believe" - lot of confidence there ...
"While management believes that these non-GAAP financial measures provide useful information, they are not operating measures
under U.S. GAAP and there are limitations associated with their use."
And does GM think these numbers are "completely" (subjective - 25%, 50%, 75%?) comparable to other companies. NO! Here's their words:
"GM’s calculation of these non-GAAP financial measures may
not be completely comparable to similarly titled measures of other companies due to potential differences between companies in their
method of calculation."
Because GM is non-GAAP meaning they may contain non-standard methods; while other companies that are public have to report using GAAP.
Now let's see what GM says about how useful these non-GAAP numbers are (which may include a lot of Goodwill as dieselone noted), versus the bottom-line of the Net Profit.
"As a result, the use of these non-GAAP financial measures has limitations and should not be considered in
isolation from, or as a substitute for, other measures such as Net income or Net income attributable to common stockholders."
http://media.gm.com/content/dam/Media/gmcom/investor/2011/Q3-2011-Highlights.pdf- -
In summary, you are asking a non-applicable question - if there is something wrong with GM's accounting. If it's non-GAAP, the accounting is whatever rules the accountants applied to the base assets and liabilities of GM. It's like asking whether a batter got a hit ot an out, when they're still in the on-deck circle.
So this really means that all of GM's financial numbers are at best, somewhat suspect relative to other companies that are following the stricter requirements of GAAP.
I think as my numerous posts here have shown, the GM government-run and government-recapitalization, along with all the stimuli, is a very complicated story. I believe most of the complication is intentional, to alleviate attention that a single large bailout would have drawn.
When I get some time though, I'll look for some stories on that particular aspect. I'm an engineer, with grad. courses in Finance and Accounting, but am not an expert on bankruptcy law, or what special provisions GM was given. A lot of "unusual" business arrangements were decreed during 2009.
That is likely the case.
Accounting can be art and estimation more than science. There is a fair amount of leeway and alternative methodology allowed under GAAP.
No question. Many of Enron's accounting shenanigans were originally approved by the SEC and we know how that turned out.
Regards,
OW
It's right in the Link address 3Q 2011; not 2010. If you open the link you will also see "2011" above the data. I wanted as current as I could find.
Second, I believe it is more a managerial analysis than a financial reporting document.
Yes. That is my point. At least until that point I can't find GM posting any GAAP financial documents. They are not necessarily equivalent to other GAAP reporting corporations. It could be close to GAAP or far-away.
There are many examples of unanticipated failures after fully audited GAAP documentation.
There are several types. You have the frauds like Enron, where illegalaties were carried out, put knowingly (lies) put into a GAAP document, and the SEC failed to investigate deep enough or ask the right questions. Then you have companies that are following GAAP and making an honest effort, but may find the value of the company has changed greatluy in 6 months or a year - say a company that owned retail mall space; or the value of old Kodak patents.
The difference here is GM fits in neither of these categories. GM is being supported with the financial and legal backing of the Treasury, the greater Executive branch (don't forget the old "auto Czar"). Remember GM's bailout was part of TARP, which could be likened to financial-marshal-law.
Anyway for those of you interested in how unique and beneficial even a regular bankruptcy can be to a corporation, try this - http://www.usatoday.com/money/companies/management/story/2012-01-22/bankruptcy-a- - -reprieve-for-some-companies/52745792/1
GM got the platinum version of that! Oh, don't want anyone to miss this gem: "Bankruptcy laws in this land are kind of criminal," says Frank Hurt, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. "The employees get a screwing and are last on the list of creditors. It's asinine and ridiculous, but that's what the law allows. The people who own the gold make the rules."
Yes, actually.
A true Joint Venture is when a car is co-developed with resources used on both sides.
GM (or anyone) buying minority ownership does not mean those should count as sales. GM announces those in their press release, and the media is just picking it up on the PRnewswire, but they are crying foul, and I agree.
Again, look at this picture. Is there any GM at all in this van? Zero.
URL: http://www.aeolus-expert.com/catalog/pics/Wuling_0_5MT_Cargo_Van.jpg
The largest auto market in the world should be ignored?
No - those are Wuling sales, not GM sales. Wuling's van, R&D, distribution, everything. Wuling indeed report those sales as their own, as mentioned earlier.
My Point - to be clear - those sales are being counted twice!
Pretty neat stuff. Kids these days...spoiled I tell ya!
I've heard similar warranty horror stories from a guy that owned a GM truck at work.
They tried the "your warranty is expired because it is from the date of manufacture, not your date of purchase" argument and trick on him. He appealed to GM customer service/relations and got no where.
I tend to believe random people, as they are much more credible than a bankrupted and bailed out company.
If we could limit that support to at a minimum, competently managed companies, then GM would not be included.
They have performed horribly for decades. It is throwing good money after bad.
2014 Malibu 2LT, 2015 Cruze 2LT,
Pretty neat. I've seen movie previews done in that manner. That was in Hollywood.
"NHTSA does not believe that Chevy Volts or other electric vehicles pose a greater risk of fire than gasoline-powered vehicles,". When did it become popular for scientists and engineers "to believe". Are they astrologers, or working with mathematics and physics? Belief vs. facts.
"The NHTSA said that "no discernible defect trend" exists and that the changes GM made should lessen the potential for problems."
I could have told them that before starting! How could there be a trend based on the few Volts that are on the road, and the much smaller population that have been in a serious accident! What's the next study? to see if there is a trend of - people driving around with aardvarks have more accidents than people driving around with dogs?
This is complete B.S.
Take thirty seconds to look at any GM warranty book, now or then, and it plainly states from 'date put in service'.
OK... I think we've all crossed the line when we begin to slander the good name of aardvarks!
I agree with your assumption, though.... A couple of points on a graph do NOT make a trend.
Still, it wouldn't worry me to ride around in a Volt, but I might display a tad more concern parking it in my attached garage overnight, due to what may or may not be a potential fire hazard. IMO, we probably need a bit more "real world" experience and exposure to put this issue to bed.
Wasn't sudden "exploding into flames" a relatively recent problem with Ford... leaking cruise control/brake line sensors allowing brake fluid to drip on the hot exhaust manifold?
My initial feeling is that, without complete information, I have a problem accepting valid warranty claims denial as actually happening.
For example, if someone shows up with a burned-out clutch, and its clear the car has been abused, warranty denial might be invoked with reasonable explanation.
I have read on the Nissan, Hyundai and Mini forums here on Edmunds about claims of warranty repairs refusal, but no one has clearly demonstrated (at least to me) anything close to a full explanation of why the repairs were denied.
Usually, its something like "My xxx broke, and the dealer refused to fix it, and the car only had 30K miles on it, and I've been driving cars like this for 40 years...".
It may indeed be happening, but I certainly have never had such an experience like it.
When I see an inferno like that, sadly I'm reminded of the family in CA who perished in their Lexus.
The suit against the dealer (Bob
BarkerBaker Lexus) is still pending.Yeah, if anything, gas tanks are more volatile then the Volt's batteries ever will be.
I think the media over-reacted once again. The Volt is a hated target (just ask Cavuto or Limbaugh), just like the Prius was when it came out and had federal incentives on it. It's more about politics than the actual cars.
What bugs me is the dealers stopping orders. That shows a lack of loyalty to GM.
If there truly is a wait list, work on distribution so the cars get to the regions that want them.
They have an uphill image battle against he Cavutos of the media, and that's a shame.