Oh, the irony of vulture capitalism - where vultures ask their dying victims to finance the consumption of what's left of their rotting carcasses!
DETROIT, Mich. – General Motors Corp. said Friday it lost $2.5 billion in the third quarter and warned that it could run out of cash in 2009 if the U.S. economic slump continues and it doesn't get government aid.
GM also said it has suspended talks to acquire Chrysler. While it didn't specifically name the automaker, GM said it was setting aside considerations for a "strategic acquisition."
"While the acquisition could potentially have provided significant benefits, the company has concluded that it is more important at the present time to focus on its immediate liquidity challenges and, accordingly, considerations of such a transaction as a near-term priority have been set aside," the company's said in a statement.
The automaker said its cash burn for the quarter accelerated to $6.9 billion, and government aid will be "essential" because of the slow economy and credit crisis.
The move comes hours after Ford Motor Co. said it lost $129 million for its third quarter and will cut about 2,260 more white-collar workers in North America as the industry tries to weather the worst economic downturn in decades. As U.S. and global economies have rapidly deteriorated, auto sales have nearly shut down.
GM said government aid is "essential" to help the U.S. auto industry through the downturn.
"The third quarter was especially challenging for the auto industry. Consumer spending, which represents close to 70 percent of the U.S. economy, fell dramatically, and the abrupt closure of credit markets created a downward spiral in vehicle sales," Chairman and CEO Rick Wagoner said in a statement.
The automaker reported a net loss of $4.45 per share during the quarter, compared with a record-setting loss of $39 billion, or $68.85 per share, a year ago [so, they're actually doing much better than last year, yet they still want a hand out from poor people!!!]. Its adjust loss was $4.2 billion, or $7.35 a share, with an adjusted loss of $2.8 billion for its automotive operations.
Revenue fell to $37.9 billion from $43.7 billion, due largely to credit freezing across the globe.
The loss exceeded Wall Street estimates. Analysts surveyed by Thomson Reuters predicted a loss of $3.70 per share on sales of $39.4 billion.
The struggling company announced it would improve liquidity by $5 billion by the end of next year by cutting capital spending, reducing sales promotions, and further cutting production in the first quarter.
The company also suspended its matching contribution for employee 401K plans, and suspended tuition reimbursement. In addition, salaried employees will not get incentive pay next year for their work in 2008, GM said.
GM increased its plan to reduce salaried worker costs to 30 percent. During the summer, the company announced a 20 percent cut.
"Even if GM implements the planned operating actions that are substantially within its control, GM's estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business," the company said in a news release.
"Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve" or it receives government funding, the news release said.
GM said it had $16.2 billion in cash, marketable securities and readily available assets at the end of September, down $4.8 billion from the $21 billion it reported on June 30.
GM has said in the past it needs a minimum of $11 billion to $14 billion to run the company.
GM shares fell 68 cents, or 14 percent, to $4.12 in morning trading.
The company also said it will slow down assembly line rates at North American factories beginning next year, but it gave no details. It also said several vehicle new vehicle programs would be delayed, but it would spend more on its Chevrolet Volt electric car and other fuel-efficiency programs.
Ford said in its earnings report earlier in the day that it burned through $7.7 billion in cash in the third quarter.
Its global automotive operations had a pretax loss [???] of $2.9 billion for the quarter, compared with a pretax loss of $362 million a year earlier.
Sales fell 22 percent to $32.1 billion from $41.1 billion due to lower volume and the sale of Jaguar and Land Rover.
"While Ford has been dramatically affected by the difficult business environment, we remain absolutely convinced that we have the right plan and are taking the right actions to weather this difficult period and emerge as a lean, globally integrated company poised for long-term profitable growth," Alan Mulally, president and chief executive, told industry analysts during a teleconference.
These manufacturing giants preyed on the working class of America by cutting wages, slashing health benefits, robbing pensions and exporting jobs; an squandered the vast fortunes they collected from American consumers by handing out millions upon millions in pay and bonuses to their top executives, and billions upon billions in interest to their parasitic "financial arms," who in turn simply borrowed the money from foreign banks at interest-free.
Now that almost all the bleeding and plundering is done, they add insult to injury by running to "uncle sam" for a hand-out so they can finish off their hack-job on our economy and our lives.
How ironic, indeed.
It's time for Americans to wakeup and smell the carcass that's rotting...
the vultures have not only ravaged our economy, they're begging for seconds with one foot out the door.
Submitted by qrswave on Fri, 2008-11-07 19:16
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If you can get handouts by robbing your bank from the boardroom why not get handouts producing something tangible instead of derivatives?
Toyota is likely to live in the same world of realities as the three US automakers. However, it still turns a profit in spite of the fact that the yen has strengthened compared with the US dollar.
Could it be that the real difference is that the Japanese are in this business in order to build decent cars but the Americans have fully submerged into the cleptocracy culture cheating customers, workers and now aiming for the tax payers. If the US wants to demonstrate that it is different and better than the USSR before its economic and political collapse, if it wants to demonstrate the strength of the free market it will let these companies go under in order to avoid giving favours to the corrupt and incompetent. The second best solution will be to pay a subsidy per sold car across the board. The only problem with that is that there is no financial foundation for such largesse. It is not only the car industry which is broke, it is the US.
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Adelson, CEO of the Las Vegas Sands Corp., has seen his net worth plummet over the last year. As Forbes reported in September, “The biggest loser this year was casino mogul Sheldon Adelson, whose fortune has fallen $13 billion in the past 12 months—$1.5 million per hour—as shares of his Las Vegas Sands have dropped 75% from their all-time highs last October.” And from August 29 to October 1, Adelson’s worth dropped $4 billion—“the steepest drop among Americans who lost $1 billion or more during the credit crisis.” Those numbers, of course, came before the stock market crashed earlier this month. As Forbes.com quipped, “Rough year for Sin City’s richest man.”
With shares in his casino empire plunging 65 percent, Adelson could cut back on his charitable giving. In fact, he announced in September he would do just that. “On September 9, billionaire casino mogul Sheldon Adelson announced that he was reducing his donations to Birthright Israel in 2009 and 2010, respectively, to $20 million and $10 million, after giving $70 million over the previous two years,” reported the Forward. Perhaps most noteworthy about the funding reduction is that it represents a turnabout in Adelson’s stated commitments; he had pledged in 2007 that “he and his wife would give at least $30M a year for as long as is needed,” according to an article posted on the website of the Adelson Family Foundation. Birthright Israel pays for young Jewish people from around the world to visit Israel for 10 days. As the Forward noted, “Adelson’s reduction in his gift will have a direct impact on the 18-to-26-year-old Jews who are Birthright’s target audience. Trips cost roughly $3,000 per participant, meaning that unless the organization raises other funds, it will lose the ability to fund more than 3,300 trips in 2009, and nearly 6,700 trips in 2010.”
The diminished circumstances of the gambling mogul could well impact the fortunes of neoconservatives and other hawks reliant on his funding. Adelson is deeply connected to Israel’s Likud Party, a hawkish faction that generally opposes a two-state solution to the Israel-Palestinian conflict and has found much support in the neoconservative community. He has given considerable funding to the Zionist Organization of America and to the American Israel Public Affairs Committee (though he cut off his funding for the group after it endorsed the Annapolis peace talks). Another of Adelson’s pet projects has been funding the Adelson Institute of Strategic Studies at Jerusalem’s Shalem Center. The institute, chaired by former Likud Party member Natan Sharansky, was founded in 2006 with Adelson’s financial backing. In January 2008, it co-organized the Herzliya Conference on Israel’s national security; influential and well-connected speakers and panelists included Dick Cheney’s former Middle East advisor David Wurmser; Ben Wattenberg of the American Enterprise Institute; Steve Emerson; former U.S. ambassador to the United Nations John Bolton; and neoconservative figurehead Norman Podhoretz, among many others. And in 2007, the institute co-sponsored the Democracy and Security Conference in Prague, which the Adelsons attended. Participants included George W. Bush, Sen. Joe Lieberman, Richard Perle, Bruce Jackson, Michael Novak, and others with neoconservative links. With Adelson’s own funds now seriously diminished, it would not be surprising if he were unable to fund the institute to the degree he had in the past. This could put a dent, however small, in the ability of like-minded neoconservatives and foreign policy hawks to gather and conduct their business."
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&f...
Unless casinos are in line for some of this largesse.
My bet is that Sheldon cashed out BIG before this Oopsie and has a big chunk of money stashed offshore in some tax free haven.