Not accurate. The big write-down was related to deferred income taxes credits that were deemed unsuitable for carrying on the balance sheet.

His arrogance and stupidity toward HEV led to GM’s bad public image, especially in San Francisco area. 85% people here buy foreign cars, out of those who buy sedans, that figure is about 96%, you hardly see any new American cars, a few you see are probably fleet vehicles! Fire Bob and Rick and bring good management (from Japan) to run GM!

The article refers to the $38 billion charge, but it doesn’t explain what it was. Over on the Fastlane blog, they seem to be blaming it on the GMAC, sub-prime issue, but I don’t think that’s it either. My biggest concern is that Lyle and the bloggers don’t get mislead by this vague and misleading (whether by intent or not) information out of GM.

At least they appear to have dumped half of GMAC onto Cerberus at the perfect time. If Cerberus survives the combination of GMAC and Chrysler, they should go to Las Vegas and start a magic show.

Thanks for you comment on the history of the electric car. Alas, how true.

Mark in WI, #19:

Thanks for your great analysis.

The mirrors are flashing, the blue smoke is boiling, and the spin machine is turning 7000 rpm. Alas, how are poor souls such as we to understand?

After they buy out all the workers, offshore all the production, and still can’t make any money, who will they blame then? Us? At least then I won’t have to agonize about buying an import any more.

I surfed the issue. All reports that I could find attributed it to a one-time tax issue. I found an interview with Bob Lutz that spoke about it being a loss that GM had deferred reporting for several years. The only place I’ve seen the reference to the retiree buy-out is the article on this site that we are commenting about. I does not change my view. Either way, GM reported a record-loss based upon a one-time issue (tax or retirees, or both) and simultaneously announced that it was going to try to buy out all of its US employees. The timing is not an accident.

This is classic propaganda. GM is creating cover for slashing wages by announcing a loss that, in Bob Lutz’s own view, does not reflect the current status of the company. Also, the market watch report linked above noted that one of the things weighing GM down was its investment in mortgages, not its automotive operations. Come on folks, let’s not bash the workers here.

It is not a matter of opinion wether we are or not. The definition of a recession is 2 consecutive quarters of negitive GDP. As of 4th quarter 2007, we have not had any negative quarters of GDP.

Of course there is the other definition, “a recession is when your neighbor loses his job, a depression is when you lose your job”.

Based on that I have never been in a recession in 25 years in the work force. Unless you count the one day I was out of work when I was laid off.

Why the media and pundits get away with making it sound like it’s a debatable issue I’ll never know.

Perhaps this could help :
http://www.marketwatch.com/news/story/gm-posts-loss-reaches-buyout/story.aspx?guid=%7B4C37D2BE%2D17D0%2D48EE%2D93E8%2D4332401642AA%7D

I have difficulties to understand also, but the GM share does not seem to depreciate today, so perhaps the marked has understood better than us.

As I remember it, this was the explanation last fall when it first came up as well. Evidently, they have had these huge tax losses, which they have booked as an asset somehow, because they could write them off agaist future profits. Now they have decided (with the help 0f the IRS? The SEC?) that these profits are unlikely to materialize. Thus these assets were stricken from the books, to more fairly (legally?) reflect the true financial status of the corporation, creating the huge loss.

So which is it? I am confused.