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Yesterday's earnings' report by General Motors threw up some red flags that I reviewed here. In recent quarters, the media seemed to give quite a bit of coverage on GM's earnings, but not so this time. I wanted to follow up and discuss what the financial news networks obviously will not. The most glaring number that warrants further discussion was the $35 billion deferred tax valuation allowance. This tax credit is not allowed under GAAP (Generally Accepted Accounting Principles) but that does not stop many companies from using it as they tout non-GAAP earnings. It is the huge amount of...

General Motors reported earnings today that appeared non-eventful on the surface. Upon further inspection there are some underlying concerns, including a glaring one-time event that stands out. That is an adjustment to earnings with a tax benefit (as opposed to paying taxes) of $35 billion for a "deferred tax valuation release." This was coupled with a goodwill impairment charge of about $27 billion, which allows GM to reduce the previously unusually high goodwill assets that were recorded on its balance sheet. GM uses non-GAAP (Generally Accepted Accounting Principles) to calculate its calendar year operating income of $7.9 billion. The GAAP...

Perhaps General Motors should have put more focus on competing in the largest segment of the auto market instead of focusing on being the market leader in the least popular, plug-in, electric vehicle (EV) field. A Detroit Free Press article reported that GM had to slash Chevy Malibu prices by hundreds of dollars to try and catch up with vehicles like the Toyota Camry, which is currently eating the Malibu's lunch. Chevy spokesman Michael Albino is quoted as admitting that, "The midsize segment is the largest and most competitive in the industry." Maybe GM should have realized that when they...

January's dismal numbers for Chevy Volt sales may give a clue as to how successful (or not) President Obama will be in reaching his goal of having a million electric vehicles (EVs) on American roads within the next few years, a goal that is increasingly becoming unlikely. It also gives us a glimpse into a bizarre strategy General Motors has had by focusing so strongly on plug-in cars while they lose market share elsewhere. The numbers are in, and GM can proudly say that they are the market leader in an insignificant field with a paltry 1,140 Volts sold in...

Someone gave the Chevy Volt a tuxedo, and it fits well. The Cadillac ELR coupe is the luxury automaker’s take on extended range electric vehicle, and its first ever hybrid car. The dramatic two-door is wider than the Volt and dressed in a slightly toned down version of the sharply creased, broad shouldered bodywork seen on the Cadillac CTS coupe. It rides on turbine-look 20-inch wheels and features vertical head and brake light clusters, the latter with a slight tailfin design. Like the Volt, the ELR is powered by a combination of an electric drive unit and 1.4-liter internal...

General Motors finished 2012 with a 17.9% market share in the US and is expected to repeat the performance in 2013 according to a Bloomberg report. The number is at the lowest point it has been since 1924. So what is behind the dismal numbers at GM that sees the company performing at 88 year lows? Before speculating on why GM has lost so much market share to the competition, I must point out the technicality that the company has actually only been in existence for 3 1/2 years, so we are comparing market share to "Old GM." "New GM"...

The final tally is in for 2012 Chevy Volt sales. The good news (which is what most headlines will trumpet) is that sales for General Motors' flagship green vehicle tripled from 2011's paltry 7,671 to a slightly less paltry 23,461 in 2012. The bad news is that the number is almost half of GM's sales goal of 45,000 in 2012 for the Volt. The further bad news is that the Volt has so little demand in most regions that some dealerships are refusing to pay for required tools to repair the vehicles and are choosing to cease selling the vehicles...

Administration puts an expensive end to a disgraceful episodeGeneral Motors will no longer be “Government Motors.” The Treasury Department on Wednesday announced its intention to liquidate federal holdings in the automobile company over the next 15 months. The final tally will show this policy has been a disaster for taxpayers. Under the best case scenario, the public will wind up shelling out more than $13 billion by the close of this unfortunate episode. Though President Obama has portrayed the GM bailout as saving Detroit, it was really a reward for the auto unions. It was a celebration of bad management...

Let's all rejoice! The Treasury Department is finally beginning to unload the taxpayers' stake in General Motors after a three and a half year stint of government involvement in the company. While the decision to get taxpayers out of the private sector is the correct one, the move is hardly a cure-all for what ails GM. And despite reports to the contrary, this does not bring closure to all groups that were involved in the unprecedented intrusion of government into the private sector that saw politically-powerful groups like the UAW receive favorable treatment over other classes. Let's start by reviewing...

This was a week of some surprises and some perfectly foreseeable consequences of forces which have been in play for some time. The fiscal cliff talks have gone nowhere, to the surprise of only the most daft who do not realize that the President does not want a pragmatic solution. He's fixated on soaking "the rich", stirring up class hatred and trying to drive a wedge between his opposition forces. Among the surprises is this: Michigan, long seen as the showplace home of America's industrialized unions, has voted to become a right to work state. Its Governor Rick Snyder said...

Now that Barack Obama is safely ensconced in the White House for another four years, several items which should have been noticed or revealed before Election Day have come to the fore. Collectively, they tell us two things: that the pre-election economy was worse than voters were led to believe, and that the prospects for meaningful improvement under the current regime are bleak at best. Additionally, in at least one instance, economic activity itself was likely manipulated. The probable gamesmanship occurred at Government/General Motors, which is still effectively under Obama administration control, still on track to saddle U.S. taxpayers with...

A New York federal judge may rule imminently on a case that could reverse the General Motors (GM) bailout and send the company back into bankruptcy, according to sources close to the case. At issue is a backroom deal hatched by GM to fulfill the Obama administration’s demand for a quick bankruptcy, draining the automaker of nearly all of its cash on hand and leaving it in worse shape than it was when it collapsed in 2009. One condition of GM’s bailout was to shore up its overseas subsidiaries. On the eve of entering bankruptcy, the company cut a $367...

General Motors is making more ridiculous Chevy Volt by flooding the web with stories of how 100 million electric miles have been driven since the Volt's much-hyped inception. Let's put the boasting in perspective. In the two plus years that it took for Volt drivers to put on 100 million miles, gas-powered vehicles logged over 5 TRILLION miles in the US. It would take only 5,000 cars traveling 10,000 miles a year to log 100 million miles in two years. The Volt has fallen far short of sales goals and has cost taxpayers billions of dollars in subsidies to reach...

Albert Einstein is credited with having defined insanity as "doing the same thing over and over again and expecting different results." Well, prepare for more insanity as General Motors is doubling down on green energy and plug-in cars after the disappointing sales results from previous entries into the field. The politically-motivated hype that we saw, and continue to see, on the Chevy Volt will be repeated. This time the over-hyped vehicle will be a Korean-made, all-electric Chevy Spark. The misrepresentations from GM and the media on the Spark EV (electric vehicle) are already starting with headlines on stories ( like...

The final pieces are coming together in the General Motors' restructuring puzzle as the company has, not surprisingly, won its bid to repurchase government-owned Ally Financial's European and Latin American lending operations. GM was forced to spin off all but 10% of Ally Financial back when it was known as GMAC. Back in late 2008, the spigots of taxpayer money were open and GM had its cup out. In order for GM's lending arm (GMAC) to receive TARP funds, GM had to divest all but less than 10% of the company so that GMAC could be granted status as a...

It is being suggested that President Obama's reelection was at leaset in part helped by the auto industry bailouts , or more accurately, the portrayal of the bailouts by the president and the media. It is therefore important to surmise that the precedent setting auto bankruptcy proceedings saw billions of taxpayer dollars used to not only help the industry, but to fund the reelection of the sitting president that orchestrated the process. The greatest travesty of the 2012 election campaign may have been that the auto bailouts were never properly debated. The main point should not have been whether or...

General Motors is criticizing Mitt Romney for running an ad that says GM cut 15,000 jobs under the Obama Administration. The Detroit Free Press reported that GM spokesman Greg Martin (speaking about the Romney ad) stated, "No amount of campaign politics at its cynical worst will diminish our record of creating jobs in the U.S. and repatriating profits back to this country." Leaving aside for a moment the bigger issue of a taxpayer-supported entity improperly inserting itself in an election, lets examine the facts. A look at GM's annual SEC filings gives a clear picture of how many people were...

(Associated Posers) – DETROIT – Some high-level executives are feeling down about some of the after-effects of the so-called “bailout”. They said they miscalculated public reaction in accepting the terms dictated from Washington. “Apparently there is a bias in this country, very widespread, that people believe a business should earn its revenue by selling products or services” said one executive who requested anonymity “We were under the impression that once the people understood they were all part-owners of the company that they would take pride in it”. Instead of rightly appreciating the government taking their money and buying up 25%...

As the presidential election nears we continue to hear about what a great job the Obama Administration did "saving" General Motors. The claims are that millions of jobs were saved and Mitt Romney wanted to let Detroit go bankrupt. A review of the facts reveals that the auto bailout process that cost taxpayers billions of dollars is hardly anything to brag about. When President Obama says he "saved" GM, what he means is that his administration guided a bankruptcy process for the company, funded with taxpayer dollars. The repeated statements by Obama that Romney would have let the company go...

President Barack Obama sought on Saturday to sustain momentum from Vice President Joe Biden's strong debate showing by touting the benefits of one of his signature actions, the rescue of the U.S. auto industry, as he prepared for his next debate with Republican Mitt Romney. "We refused to let Detroit go bankrupt," Obama said in his weekly radio address. "We bet on American workers and American ingenuity, and three years later, that bet is paying off in a big way."