GM's Drop In The Bucket. Don't get too excited about the automaker's promise to repay its taxpayer loan early.

http://www.forbes.com/2009/11/16/gen...ss-autos-gm.ht
ml

DETROIT -- General Motors, suddenly sitting atop a $43 billion mountain
of cash, said it will accelerate loan repayments to the U.S. and
Canadian governments, beginning with a $1.2 billion payment in December.

If things go well, in fact, GM could use funds in escrow to pay off the
entire $8.1 billion government loan on its balance sheet--due in
2015--by June, says Chief Executive Frederick "Fritz" Henderson.

But that won't even begin to settle GM's debt to taxpayers. Most of the
$50 billion used to bail out GM is tied up in equity and, until there's
a market to publicly trade GM stock again, that investment is frozen.

There are plenty of experts who believe the money will never be repaid.
The Government Accounting Office is among them. In a recent report, it
said that for GM to repay its debt in full, it would have to achieve a
market capitalization nearly 20% greater then the company has ever had.

GM and its investors--the U.S. and Canadian governments, pre-bankruptcy
bondholders and the United Auto Workers' health care trust fund--are
anxious to unload their GM shares, which they never wanted in the first
place.

But a public stock offering depends on GM's ability to improve its
performance and prove there's value in the shares. Henderson said: "Our
objective is to be ready to go in the second half of next year."
Chairman Edward Whitacre Jr. says it could take longer, however.

From the looks of the GM's first quarterly results since emerging from
bankruptcy on July 10, it's still got a lot of work to do.

GM reported a net loss of $1.15 billion for the shortened third quarter
(July 10-Sept. 30) on $28 billion in revenue. On an EBIT basis, before
special items that included the cost of dealer closings, GM lost $261
million.

GM is drastically slimmed down after bankruptcy, making it difficult to
compare its performance with earlier results from the old GM. In
addition, the results are unaudited, and don't comply with GAAP
standards. (GM will start filing 10Q and 10K reports next year.)

Still, the "managerial" accounting provides a glimpse of GM's
performance in its first few months out of bankruptcy.

"Today's results provide evidence of a solid foundation we're building
for the new GM," Henderson said in a written statement. "With a
healthier balance sheet and a competitive cost structure, our focus is
on driving top line performance."

In its core North American unit, GM lost $651 million. Its international
business returned a profit of $238 million. A loss of more than $400
million in Europe was more than offset by profits in China and the rest
of the world.

After bleeding billions in cash for months, GM posted positive
managerial cash flow of $3.3 billion during the period as it ramped up
production after an extended factory shutdown and capital spending was
curtailed. Some supplier payments were also delayed, which helped cash
flow.

But GM cautioned that cash flow would be negative in the fourth quarter,
due to a number of factors, including more than $8.3 billion in
scheduled outflows for the government loan repayments, continued
restructuring and money it owes to its former parts subsidiary, Delphi (
DPHI.PK - news - people ).

So that $42.6 billion cash balance that GM is sitting on will be
"materially lower" by the end of the year, the company said.

Still, there's enough good news that GM can at least start putting some
nickels toward settling its debt and building a little good will with
taxpayers and consumers.


--
Nancy Pelosi, Democrat criminal, accessory before and after the fact to
Rangel's tax evasion.

Leroy N. Soetoro wrote:
> http://www.forbes.com/2009/11/16/gen...ss-autos-gm.ht
> ml
>
> DETROIT -- General Motors, suddenly sitting atop a $43 billion mountain
> of cash, said it will accelerate loan repayments to the U.S. and
> Canadian governments, beginning with a $1.2 billion payment in December.
>
> If things go well, in fact, GM could use funds in escrow to pay off the
> entire $8.1 billion government loan on its balance sheet--due in
> 2015--by June, says Chief Executive Frederick "Fritz" Henderson.
>
> But that won't even begin to settle GM's debt to taxpayers. Most of the
> $50 billion used to bail out GM is tied up in equity and, until there's
> a market to publicly trade GM stock again, that investment is frozen.
>
> There are plenty of experts who believe the money will never be repaid.
> The Government Accounting Office is among them. In a recent report, it
> said that for GM to repay its debt in full, it would have to achieve a
> market capitalization nearly 20% greater then the company has ever had.
>
> GM and its investors--the U.S. and Canadian governments, pre-bankruptcy
> bondholders and the United Auto Workers' health care trust fund--are
> anxious to unload their GM shares, which they never wanted in the first
> place.
>
> But a public stock offering depends on GM's ability to improve its
> performance and prove there's value in the shares. Henderson said: "Our
> objective is to be ready to go in the second half of next year."
> Chairman Edward Whitacre Jr. says it could take longer, however.
>
> From the looks of the GM's first quarterly results since emerging from
> bankruptcy on July 10, it's still got a lot of work to do.
>
> GM reported a net loss of $1.15 billion for the shortened third quarter
> (July 10-Sept. 30) on $28 billion in revenue. On an EBIT basis, before
> special items that included the cost of dealer closings, GM lost $261
> million.
>
> GM is drastically slimmed down after bankruptcy, making it difficult to
> compare its performance with earlier results from the old GM. In
> addition, the results are unaudited, and don't comply with GAAP
> standards. (GM will start filing 10Q and 10K reports next year.)
>
> Still, the "managerial" accounting provides a glimpse of GM's
> performance in its first few months out of bankruptcy.
>
> "Today's results provide evidence of a solid foundation we're building
> for the new GM," Henderson said in a written statement. "With a
> healthier balance sheet and a competitive cost structure, our focus is
> on driving top line performance."
>
> In its core North American unit, GM lost $651 million. Its international
> business returned a profit of $238 million. A loss of more than $400
> million in Europe was more than offset by profits in China and the rest
> of the world.
>
> After bleeding billions in cash for months, GM posted positive
> managerial cash flow of $3.3 billion during the period as it ramped up
> production after an extended factory shutdown and capital spending was
> curtailed. Some supplier payments were also delayed, which helped cash
> flow.
>
> But GM cautioned that cash flow would be negative in the fourth quarter,
> due to a number of factors, including more than $8.3 billion in
> scheduled outflows for the government loan repayments, continued
> restructuring and money it owes to its former parts subsidiary, Delphi (
> DPHI.PK - news - people ).
>
> So that $42.6 billion cash balance that GM is sitting on will be
> "materially lower" by the end of the year, the company said.
>
> Still, there's enough good news that GM can at least start putting some
> nickels toward settling its debt and building a little good will with
> taxpayers and consumers.
>
>
gm is out soon. They will fold we eat the money. Greedy workers and ceo's.