January 8, 2010

GM’s 2010 Profitability Brag Masks Its Thin Lead in Domestic Unit Sales, Subsidies from Overseas Profits


Toyota and Ford are on the verge of catching Government/General Motors in monthly U.S. vehicle sales. Based on the sales trends at the three companies, GM may lose its domestic kingpin status in just a few months.

I heard the December facts giving rise to the aforementioned tidbit on the radio Monday afternoon, and wondered whether the commentator came up with them on his own or if early wire reports had relayed them. If it’s the latter, the relevant points seem to have disappeared from later wire service dispatches, including this one from the Associated Press’s Tom Krisher and Dee-Ann Durbin. I think they need to be plucked from the ether and emphasized, especially given the boast by the GM’s chairman that it will make a profit in 2010.

In December, GM’s sales of its four “core brands” (Chevrolet, Buick, GMC, and Cadillac) barely edged out Toyota and Ford. Here are the numbers, referencing the Wall Street Journal’s monthly vehicle sales report and subtracting non-core brand sales (Pontiac, Saturn, Saab, and Hummer) per the company’s Tuesday media release:

206,670 — Total GM Sales in December
14,687 — “Non-core brand” sales
191,983 — Net “Core brand” sales

187,860 — Total sales at Toyota

178,063 — Total sales at Ford

GM’s core brand sales beat out Toyota and Ford by 2.2% and 7.8%, respectively. GM’s press release claims its December core brand retail sales (excluding fleet sales) were up 13% over December 2008. Both Ford and Toyota registered total year-over-year December sales gains of over 30%. GM only has about 5,100 “non-core” units left to sell. It doesn’t take a math whiz to see that GM’s status as domestic sales leader is in serious short-term jeopardy.

This takes me back to GM’s profitability promise.

The Wall Street Journal’s Sharon Terlep and Neal E. Boudette abandoned the restraint usually practiced by Journal reporters and called GM Chairman Ed Whitacre’s prediction “a bold and surprising forecast for a business that exited bankruptcy proceedings just last summer and hasn’t turned an annual profit since 2004.” Zheesh; the company walked away from about $30 billion in debt in the bankruptcy process and waltzed out of bankruptcy court after having received over $50 billion in government aid. The real question should be how the company could still lose money after getting such an unprecedented level of largesse.

If GM indeed achieves profitability in 2010, it will likely be because its profits overseas, especially in Asia, will exceed losses incurred in North America and Europe. After reviewing the company’s “managerial income” information for the third quarter, the Associated Press reported that the company “earned $429 million before taxes and interest at its Asia Pacific unit, and $245 million in Latin America… and …. lost $651 million before taxes in North America and $437 million in Europe.” Major players Toyota, Ford, Honda, and Nissan, along with and feisty smaller brands like Hyundai and Kia, continue to gobble up most of the increased volume arising from the U.S. economy’s tentative attempts at recovery.

Why we’re supposed to be impressed if GM really does make a profit on the backs of its Chinese and Latin American operations even after massively subsidizing its still bloated US, Canadian and European efforts, and how that achievement would justify the expenditure of tens of millions of taxpayer dollars during 2008 and 2009, are both mysteries to me.

Cross-posted at NewsBusters.org.

There’s A New Sheriff in Town…

Filed under: 2nd Amendment,Activism,Taxes & Government — Rose @ 7:23 pm

…and we’ve got his back.

There is no way I can do this piece justice, but I hope you’ll join me in forwarding it to your local Sheriff! (HT: Oath keepers)

Local Sheriffs Are Last Defense, Former Lawman Says
By Vince Devlin of the Missoulian

…He’d sworn, he discovered, to uphold and defend the Constitution of the United States. And he’d sworn that he’d do so against enemies both foreign and domestic.

We know who America’s foreign enemies are, Mack told the crowd.

The domestic enemy he fights today is a federal government he says is bent on taking away people’s rights and freedoms.

And who can fight the massive federal government?

Your local sheriff, he said.

Mack – a former two-term sheriff in Graham County, Ariz., who along with former Ravalli County Sheriff Jay Printz, successfully sued the federal government when the Clinton administration demanded county sheriffs enforce provisions of the Brady Bill gun control law – said his movement seeks to target 1,000 sheriff races across the U.S. in 2010.

“We can have our country back,” Mack said, “but if you think the answer is in Washington, D.C., I’ve got beachfront in Oklahoma for you.”

…While many of Mack’s backers are gun owners who believe the country is taking away their Second Amendment rights, Mack said true “constitutional” sheriffs will protect the rights and freedoms of all Americans on any front.

“What would a constitutional sheriff have done in 1959?” Mack asked the crowd.

When the call came in to the Montgomery County, Ala., sheriff’s office that a black woman was refusing to move to the back of the bus – as required by law – the sheriff would have arrived on the scene and talked to Rosa Parks.

“Ma’am, what’s the problem,” a constitutional sheriff would have asked her, Mack said. Told she had taken an empty seat and just wanted to be left alone, the constitutional sheriff would have sat down next to her, ridden with her to her stop – and, once off, for good measure taken her into a whites-only restaurant so she could buy sandwiches for her and her husband.

He’d have then escorted her home, Mack said – asked if her husband was armed and could defend his family if anyone upset by what had happened came around and threatened them – and ordered extra patrols of the house.

“Remember, segregation wasn’t a tradition, it was the law of the land,” Mack said. “Rosa Parks taught us what you do with stupid laws.”

Yep…and we have literally thousands more to eliminate.

By the way, that “Brady Bill gun control” issue was not only supported by useful idiot Mike DeWine - who is running for Ohio’s Attorney General this year – but it earned him their endorsement.

The December Employment Situation Report (010810)

Filed under: Economy,Taxes & Government — Tom @ 8:21 am

Well, this is the one that might shows jobs added for the first time in two years.

This AP report says that “Analysts polled by Thomson Reuters had been expecting the report would show the economy shed 8,000 jobs last month, fewer than the 11,000 jobs lost in November.”

If I recall correctly, this is also the day that the “Comprehensive Revision” comes out (Update: It looks like it’s February). In October, the Bureau of Labor Statistics telegraphed a preliminary estimate that the economy lost 824,000 more jobs than previously reported, I believe through March 2009.

The answers are here at 8:30.

And the answer is …. “oops”:

Nonfarm payroll employment edged down (-85,000) in December, and the unemployment rate was unchanged at 10.0 percent, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction, manufacturing, and wholesale trade, while temporary help services and health care added jobs.

November was revised to +4,000 from -11,000, so the string of losses is broken — unless January’s revision to November changes that.

The actual number of jobs lost on the ground (i.e., not seasonally adjusted) was 406,000. That’s far worse than every year from 2003-2007.

The Household Survey shows more people saying they’re not in the labor force (843,000), a 661,000 drop in the actual labor force, and 597,000 fewer people working. “Rebound? REBOUND?

More later.

UPDATE: The big thing to me is that December’s actual vs. 2003-2007 is so weak:


December’s loss of 406,000 is 219,000 worse than the December 2003-2007 average. That difference is almost identical to November, where its +114,000 trailed the November 2003-2007 average by 217,000. Both months are about twice as bad as October, where whose +678,000 trailed the October 2003-2007 average by only 110,000. That’s not progress.

UPDATE 2: James Pethokoukis at Reuters — “9 reasons why the Dec. jobs report is bad news for Dems.”

Latest Pajamas Media Column (‘Fan and Fred: Frauds by Design?’) Is Up (Plus ‘Upon Further Review’)

Filed under: Economy,Scams,Taxes & Government — Tom @ 6:05 am

FredAndFanLogos1209It’s here.

It will go up here at BizzyBlog on Sunday morning (link won’t work until then) after the blackout expires.


Upon further review

The column addresses the significance of this revelation carried in the Wall Street Journal last week:

New research by Edward Pinto, a former chief credit officer for Fannie Mae and a housing expert, has found that from the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime or Alt-A.

As I showed in September 2008, Fan and Fred motivated mortgage lenders to make exponentially riskier conventional and subprime loans by lowering the credit score approval thresholds for each. To be clear, those relaxation probably date back “only” to the late 1990s. Pinto’s research further asserts that the two entities went even further than anyone up to this point has thought by fibbing about the quality of loans it purchased — for 15 years.

To the extent they securitized these loans, Fan and Fred deceived bond investors, arguably contributing to the demise of many entities previously thought to have done themselves in on their own. To the extent these loans were kept on Fan’s and Fred’s books, they deceived shareholders, regulators, and Congress. Ultimately, Fan and Fred ripped off the American public for what is estimated so far to be something north of $400 billion. I’m guessing it will be far north of that.

The big “upon further review” question that occurred to me after I submitted the column is this: Why would all of this have started in 1993 as Ed Pinto indicated? Anyone? A likely answer is below the fold if you’re on the home page.