General Motors reported 2007 financial numbers this morning. We are pleased to pass along the news that GM’s newest corporate-wide strategy to move forward has produced record results.
Unfortunately, the record isn’t something to brag about: a $38.7 billion loss, or $68.45 per diluted share, compared to a reported loss of $2 billion, or $3.50 per diluted share in 2006. That $38.7 billion loss is the largest ever for an American automotive manufacturer. Good job guys! If you’re not going to be good, at least be bad enough to set some type of milestone.
Other journalists are trying to sugarcoat it, indicating that the huge loss included “special items”, such as the sale of 51-percent of GMAC in 2006. Without these special items, the loss was just $23 million, or four cents per diluted share. GM’s release also noted that its core automotive business generated record revenue of $178 billion in 2007 (a $7 billion improvement over 2006) and its total corporate-wide revenue was $181 billion, (down $25 billion from 2006.)
Let’s be clear here…there are always special items to report. GM is constantly buying and selling business units, opening and closing plants, reorganizing financial entities, and negotiating contract buyouts.
Case and point, GM offered early retirement buyout options for 74,000 union workers. This will go on future financial statements as a special item. Next year two or three other major special items will appear.
GM CEO Rick Wagoner said “Our North America turnaround remains on track despite the weak U.S. economy and continued high commodity prices.”
We all understand that the room gets messier before it gets clean, but Wall Street and the public at-large were not expecting the room would look like a tornado hit it when things were supposed to be going back into closets and shelves.
Wagoner better start making real progress cleaning up GM’s crap very soon, or someone else will be tasked with putting operations, as well as special items, back into order.