Jalopnik
Despite losses totaling (please sit down, Mr. Wagoner) $8.6 billion, 2005 still wasn't GM's worst year on record. In 1992, GM took a $23.5 billion hit brought on primarily by a change in accounting procedures that forced the company to include retiree health-care costs in earnings. At the time, Rick Wagoner, then the company's CFO, called the writedown a "paper hit," that was understood and expected by the financial community. On a cash-flow basis, the company's loss for 1992 was $4.5 billion, which looked positively miniscule compared to the company's 1991 loss of $7.9 billion. By 1993, the company was profitable to the tune of $2.5 billion, mainly from cost cutting measures and despite a $982 million loss in North America. By 1997 profits were up to $6.7 billion, mainly on light-truck sales. Could GM make a similar turnaround, or are things more dire this time around? Watch this space.
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Comments
Well, if you take into account inflation, the '91 loss is significantly worse; it'd be 11.15 billion in today's dollars. But GM's return to profitability was built on cheap gas in the 90s (made cheaper by an economic collapse in Asia) and high-margin truck sales. So what GM needs right now is for China's economy to implode.
Of course, now that I think about it, isn't that one of the few places they're making money?
Removing the camaro for a few years and then re-releasing it was pretty lame. I bet they hope to sell more than ever since they did away with the camaro for a few years. Now everyone will want one....NOT. We shall see.
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