Shhh: Ford’s Revenues Top GM’s Again; AP Still Treats As Smaller Firm
Government/General Motors announced today that it lost $4.3 billion during the second half of 2009 (actually from July 10 through the end of the year). A further look at that result will come later after yours truly has time to digest GM’s 10K Report to the Securities and Exchange Commission.
What stood out even further for me about the announcement was GM’s top line, i.e., global revenues. That figure came in at $57.5 billion.
Ford’s revenues during the final two quarters of 2009 came in at $66.3 billion, or roughly 15% higher. GM’s ten missing days in July would only explain about one-third of that difference.
It may be out there, but I haven’t seen a lot of establishment media recognition that Ford is a bigger company worldwide than General Motors, and has been since the first quarter of last year. Given that GM was larger than Ford for about the previous 80 years, Ford’s ascension to the top spot among US-based companies in worldwide revenues would ordinarily be what is known as “news.”
In fact, though it is true that Ford’s domestic unit sales still trail GM, the Associated Press’s Dee-Ann Durbin still treated the smaller company as the kingpin in her coverage of GM’s brief announcement today. Durbin also wrote as if the idea that the government-controlled company will be able to go public is a certainty, and threw in a laugher of a paragraph about how things are supposedly getting better at Chrysler, where year-over-year sales are still in decline (bolds are mine):
GM owes an additional $45.3 billion to the government. That will be repaid when GM makes a public stock offering, which Liddell says will happen “when the markets and the company are ready.”
Liddell, who came to GM at the beginning of the year from Microsoft Corp., wouldn’t say whether GM will make money in the first quarter, but said there’s a good chance the company will make a profit in 2010 based on encouraging first-quarter sales and production. GM plans to release first-quarter results next month.
“I think there is a danger of overpromising and underdelivering,” he said. “When we put the numbers on the board, we will come out and tell you about them.”
GM, which remains the largest car company by sales in the U.S., saw a slight gain in U.S. market share in the first three months of this year compared to a year ago.
… Things are also on the mend at Chrysler Group LLC, which also went into bankruptcy protection last year and is now managed by Fiat SpA. Chrysler CEO Sergio Marchionne said last week that the automaker has $5 billion in cash on hand and expects to break even this year. Chrysler plans to provide more detailed financial results later this month.
According to the Wall Street Journal’s monthly vehicle sales report, Durbin’s final excerpted statement is so barely true that it wasn’t even worth citing. GM’s first quarter 2009 market share was 18.5%, while the first quarter of 2010 came in at 18.7%. Subtract out the effects of what was from all appearances a government- and media-orchestrated campaign against Toyota that had its worst effects during January and February, and GM’s model lineup is in no way better than it was a year ago.
Cross-posted at NewsBusters.org.
UPDATE, April 8: I also should note that the AP’s headline at its main site about GM’s $4.3 billion loss was “GM ready to repay govt. loan, sees chance of profit.” Zheesh.
[...] Cross-posted at BizzyBlog.com. [...]
Pingback by BestOnlineShows.net » Blog Archive » Shhh: Ford’s Worldwide Revenues Top GM’s for Full Year; AP Implies Ford Is Smaller Firm — April 8, 2010 @ 9:28 am
Just received a letter about the GM recall for power steering failure. Gosh, I must have missed the Congressional hearing about that safety recall. Oh, the letter said GM is waiting to get parts and will let me know when I can bring the car to them for repairs. I think I’ll pass on the next stock offering.
Comment by Michael — April 8, 2010 @ 10:15 am
About Toyota: I was watching Fox and Friends this morning and they had a story about a supposed “smoking gun” memo where a worry-wart Toyota executive or some such demanded the company stop “hiding” the braking situation and issue a recall. Despite the fact the guy was, as I recall, part of the public relations part of the business and not part of the engineering department (he was not going on his own technical experience), I’m sure the media will ignore all the facts that the braking “problem” was and is rare, trumpeted via personal claims that are dubious at best, and appear to be more the result of driver error and misplaced non-Toyota floor mats than anything else and treat the hysterical memo as “proof” of wrongdoing. All it is to me is a typical public relations guy, whose job by the way to to worry and fret about everything that might make the company look bad anyway, overreacting to a problem that internal investigation had so far shown to be dubious at best and most likely incidents of driver error, and firing off a memo to cover his butt. (Did he have his eye on the Obama admin? After all, it was well known among car makers that Obama would look for reasons to punish the non-GM and Chrysler car companies.) That’s fine, every company has its worrywarts and they can be useful, but his comments are hardly a smoking gun. Memos like his are sent around every day at virtually every company. It’s not unusual. And it’s not like it was a memo from an actual head of Toyota saying, “gee, this problem is real bad but lets hide even though people might get killed so we don’t lose money.” All the memo truly is is one mans opinion about what the company should do. And the company even did issue a recall anyway despite the evidence that they truly needed to do so was lacking. I think that was more than cautious.
That said, my real annoyance is when their WH correspondent Jim whats-his-name came on to discuss it, he took a really gratuitous shot at Toyota. He insinuated that in its commercials Toyota had been bragging (what’s with the obsession with that word in regards to Toyota?) that it was selling strong but that (and here I paraphrase) “what they don’t tell you is that they have offered 0% financing and other incentives to get those sales.”
Sorry, Jim. But first of all, Toyota has told everyone about those incentives over and over again in their commercials. Duh, Jim, how would they entice people with those incentives if they didn’t tell people about them in the first place? You can’t sell something people don’t know about. Also, if you go on Toyota’s website, they have plenty of news stories from outside sources discussing Toytas sales and attributing it only (and wrongly) to those incentives.
Second, as Tom here has demonstrated over and over again, even before the incentives and during the period when the piling on of Toyota was occurring at its highest, Toyota was STILL weathering the storm and was continuing to bunk the dire predictions of industry analysis and overperforming what many of them thought Toyota would do.
Third, does Jim really think if people believed Toyota cars were the deathtrap the Naderites and Obama admin claim they are, they’d still buy them just because of financial incentives? “Those Toyotas will kill you, but hey 0%!” Let’s go get one!” Please.
While I’m sure the incentives helped, the fact is people don’t buy the anti-Toyota hype, and Toyota was doing quite well under the circumstances even before the incentives were offered.
Again, sorry, Jim but the meme that the public fears Toyota cars and only bought them because of the incentives is a FAIL.
P.S. Corroborating evidence here: http://michellemalkin.com/2010/04/06/government-motors-vs-toyota/
Comment by zf — April 8, 2010 @ 10:25 am
#3, thanks, that wasn’t Jim Engel was it? Anyway, I see the $16.4 million fine in the face of very weak evidence as you described as the last dying breaths of a bunch of sore losers who though they could take a Government Motors competitor down, and failed miserably.
Timing? Well, the anti-Toyota move seems to have distracted from the fact that GM lost $4.3 billion and a GAO report from a couple of days ago that the company’s pension plans will need huge cash infusions in the next few years.
Comment by TBlumer — April 8, 2010 @ 10:39 am
#4, Yup, that’s the guy. Forgive my laziness. Usually I’d look up info like that if I don’t remember it just to be complete, but I had only just been up for a little and was still a bit groggy and a tad cranky.
Anyway, now that I remember, I think the memo writer was the head of Environmental Public Relations or something to that effect. How that makes him qualified to judge reports about sudden acceleration claims and what could be causing them is not clear to me. If anything, I think Toyota might have been overcautious (perhaps arguably wisely) in issuing a recall even before the government got involved. Engel also brought up that there is a law saying that if you find a safety issue you have to report it to the government and that Toyota told other governments about the recall but not ours. Understood, but considering how ambiguous the reports were and considering who we have in office, I can see why Toyota informed other governments they were issuing a recall and held off informing ours. Also, that law seems vague. Lots of things could be seen as safety issues, do the feds really expect to get a report on every single one no matter how dubious or minor? I just don’t think the average citizen understands fully yet just how much federal regulations create bureaucracies within the business world and how much they add to the cost of everything.
Comment by zf — April 8, 2010 @ 11:52 am
#5 —
Also, that law seems vague. Lots of things could be seen as safety issues, do the feds really expect to get a report on every single one no matter how dubious or minor?
It’s vague on purpose about what a safety defect is, but specific on timing, so that enforcement can be selective, yet look judicious.
Comment by TBlumer — April 8, 2010 @ 12:59 pm
Any good news of profitability from GM and Chrysler would appear to be very temporary. If this article is accurate, certain accounting maneuvers are helping the near-term picture:
“GM officials told us that cash contributions are not expected to be needed for the next few years because it has a relatively large “credit balance” based on contributions made in prior years that can be used to offset cash contribution requirements that would otherwise be required until that time.”
“… according to GM’s projections utilizing valuation methods defined under PPA, large cash contributions may be needed to meet its funding obligations to its U.S. pension plans beginning in 2013.”
“Similarly, Chrysler’s management expects that contributions to meet minimum funding requirements may begin to increase significantly in 2013, but are projected to be relatively minimal until then.”
http://www.theatlantic.com/business/archive/2010/04/gm-more-troubles-coming-down-the-road/38603/
The author gets one thing wrong at the end of the article: the Bush administration was actually the first to say that the Big3 could use TARP money. The Obama administration gets the blame for the Bankruptcy procedures.
Comment by Cornfed — April 9, 2010 @ 10:45 am
#7, I didn’t understand that from this NYT piece:
http://www.nytimes.com/2010/04/07/business/07cars.html?ref=business
But I think you’re correct upon a more careful reading where NYT says “within 5 years.”
Comment by TBlumer — April 9, 2010 @ 11:40 am