Is G.M. profit news a smoke screen to justify bail out?
G.M. showed a sizable profit for 2011. But is this just temporary? Are their profits up this year because their competition, Japan, wasn't producing cars this year due to quakes,tsunamis and nuclear problems? This changes the field a little.
Oh dear, my opinion is that GM is an American Institution that we should keep regardless....I am perhaps a minority in this..
This is just balance sheet gimmick to show rescue is working. This is not going to have same next year and as soon as benefits and other subsidies are removed you will see GM again going into red, sooner or later.
Your question is crazy. GM actually made a profit this year as did Ford( which did not take a bailout) and even Chrysler. That is GOOD news not bad news.
Why would they put up a " smoke screen" about making money? For one thing they can't-- cooking the books is against the law and has gotten harder to do since the debacle of 2008.. They have shareholders and auditors to answer to. They are a private corporation and not a government agency.
They have paid the government back every penny and they are on their own now. Obama made the right call on this one and saved the American auto industry by a very limited and controlled government bailout which is now over and done with..
Have you got a problem with that?
I was at the North American International Auto Show in 2011 - as a freelance writer guest of Ford - and I can say that overall, the American auto industry is doing very well, and has been for the past 18 months or more. Upcoming technology is exciting and responsive to what the consumers have been asking for, and people will soon have more options regarding fuel combustion engines, hybrids, and 100% electric cars. U.S. automakers are on the cutting edge in many respects.
I'm with Robie in that there cannot be any way to "cook the books" to falsely show a profit for GM. Moreover, the trend was already on the way up as far as profits, well before the tsunami hit Japan. The bailout worked, taxpayers are not owed any money from GM or other automakers, and there is no need for any "justification" at this point.
The quake certainly hobbled Toyota and Honda. (Especially Honda.) But, as has been pointed out, cooking the books can be big, BIG trouble.
I think this is for real.
That said, there are no guarantees for the future, and there is a lot of competition in car-making--not to mention a lot of social and economic turbulence to come. I don't think there's any way to know for sure who the winners and losers will be at a given future time.
I'm heariing now that sales figures published by G.M. included all the autos that are sitting in dealership parking lots that are on G.M. floor plans. This is a huge number of cars that are not actually sold to consumers but inventory that has merely been rearranged. And with that, so have the books and the figures that have been released to the public. For those who are so sure that books aren"t "being cooked", I hope you are right, but I'm afraid many are dissolutioned about what we are being told. Let me remind you of similar issues. Freddie Mac and Fannie Mae; Solyndra and the list goes on. This whole G.M. story, I thought was too good to be true and I'm afraid I was right.
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