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Channel Stuffing At GM?

Tyler Durden's picture




 

Hidden deep in today's disappointing GM November sales release is a number that all GM longs may want to quickly forget, or else pay serious attention to. But first, earlier today, GM reported slightly disappointing sales numbers: the newly IPOed company sold 168,739 cars in November, a 11.4% increase to November 2009, which came in below expectations of a 13% rise. That's mostly noise. What isn't, however, is the linear rise in GM's auto inventory safely stashed away at dealers, i.e., unsold. The chart below demonstrates what some may argue is nothing less than a blatant case of channel stuffing. Is it really surprising that GM will resort to such pathetic schemes to boost its top line numbers? Of course not: the government's GDP report demonstrates that this is occurring everywhere in the US economy, courtesy of near record inventory accumulation which two years after the start of the depression refuses to let up, providing a hollow boost to economic numbers as the much anticipated pick up in end demand (sorry Goldman) courtesy of record deleveraging ( Jan, let's discuss the hundreds of billions of leverage lost in the shadow banking system on December 7 shall we?) continues to accelerate.

It is obvious that beginning in July, GM has started an aggressive channel stuffing program whereby it offload tens of thousands of cars (over 110,000 since July) on dealer lots, hoping these will get sold somehow, at some price, all the while dealers enjoy taxpayer subsidized floorplan leases which allows them to hold nearly infinite inventory. If and when the liquidation event takes place who cares? After all the company is now public and has managed to massage it artificial sales numbers sufficiently to fool investors that there is actual end demand for its cars.

So what would have happened if in October GM had held its dealer inventory flat (not declining, just flat): well, the top line number would have been 21,000 cars less sold. Which also means that total sales would have been not 169k but 148k, and instead of a 11.4% increase, GM would have reported a drop of 2.4% in November sales YoY, which would have made the life of GM DMM GETCO that more unbearable as the High Frequency Trader would soon end up with 100% of the stock float at $33.

And just to show that dealer inventory is actually not a bad thing, despite the spin that the company and Phil Lebeau may come up with, we present the Company's very own December 2009 sales report in which it itself boasted how efficient it was in having its dealer inventory at year end 2009 be the lowest on record: "U.S. Dealer Inventory Reaches 385,000 – Lowest Year-End Level on Record." So what happens when the inventory is the highest in years? One will likely not see a comparable statement in today's sales release. Sure enough, try hard as we might, there is no spin from GM's corporate spinsters that had anything good to say about today's 536,000 cars in dealer inventory.

Bottom line - if indeed GM is right, and manages to sell hundreds of thousands of cars in December, we will take back everything we said above. On the other hand if the number remains flat, or, heaven forbid, increases, it will be more than obvious that GM is now involved in nothing less than the most transparent channel stuffing scheme we have seen in years.

 

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Wed, 12/01/2010 - 17:29 | 769701 spartan117
spartan117's picture

The dealers will need a bailout as well.

Wed, 12/01/2010 - 17:43 | 769766 whatsinaname
whatsinaname's picture

TD, whats happening on Dec. 7th that pertains to shadow banking ?

Wed, 12/01/2010 - 18:25 | 769913 treemagnet
treemagnet's picture

Me too - I wanna know.

Wed, 12/01/2010 - 20:11 | 770242 SimpleSimon
SimpleSimon's picture

The only thing I know of for Dec 7th is a European call for a bank run - withdraw all your money.

Thu, 12/02/2010 - 03:08 | 771150 StychoKiller
StychoKiller's picture

Irish voters go to the polls, oh, and a lot of repeats on TeeVee about the Germans bombing Pearl Harbor! :>D

Wed, 12/01/2010 - 22:46 | 770590 johngaltfla
johngaltfla's picture

Tyler, I don't have the numbers yet; did you see the state/Fed/rental fleet sales % report yet? It was running 32-34% of total monthly sales for GM and Chrysler, but I haven't had time to dig those out of the data yet....

Wed, 12/01/2010 - 23:01 | 770638 Cursive
Cursive's picture

Yep, November numbers were bad here.

Wed, 12/01/2010 - 17:31 | 769706 Ragnarok
Ragnarok's picture

Ahhh, the good stuff.

Wed, 12/01/2010 - 17:32 | 769715 RobotTrader
RobotTrader's picture

Anyone check out Michelle-Caruso Cabrera's new hairdo today?

And she's wearing what looks like a straight-jacket to keep her boobs supressed.

Here are some pics from the good old days....

Wed, 12/01/2010 - 17:37 | 769738 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Well, you wouldn't look at the face would you. Looks like the wicked witch of the easts offspring. I don't normally critic the way people look, but these people are all servants of evil, so i'll make an exception.

Wed, 12/01/2010 - 17:48 | 769786 plocequ1
plocequ1's picture

Oh Yea.. Come to Poppy Chulo. Poppy is waiting.

Wed, 12/01/2010 - 18:46 | 770002 Red Neck Repugnicant
Red Neck Repugnicant's picture

Those arrows are hilarious.

Thu, 12/02/2010 - 02:09 | 771064 Best Satan in Town
Best Satan in Town's picture

Ol' Pokies

Thu, 12/02/2010 - 02:37 | 771101 Buck Johnson
Buck Johnson's picture

She has to compete with Mandy Drury the hot blonde from Australia, thats why.  She used to be the hot chick after Bartiromo started to lose it now they bring in Mandy to spice it up.  Don't get me wrong I love Michelle, but I think that she knows those 36DDD's are what keeping her having shows and specials.  I feel sorry for Sue Herrera, for a woman that essentially started the network back in the early 90's she's still anchoring the desk and don't get to have her own programs or shows like the others.  You can say that she is possibly the manager, but if she was what the hell is she still flying an anchor desk.  Back in the 90's and early 2000's she had more air time, but not anymore.

I think they are going to push some people out.

Thu, 12/02/2010 - 02:38 | 771104 Buck Johnson
Buck Johnson's picture

She has to compete with Mandy Drury the hot blonde from Australia, thats why.  She used to be the hot chick after Bartiromo started to lose it now they bring in Mandy to spice it up.  Don't get me wrong I love Michelle, but I think that she knows those 36DDD's are what keeping her having shows and specials.  I feel sorry for Sue Herrera, for a woman that essentially started the network back in the early 90's she's still anchoring the desk and don't get to have her own programs or shows like the others.  You can say that she is possibly the manager, but if she was what the hell is she still flying an anchor desk.  Back in the 90's and early 2000's she had more air time, but not anymore.

I think they are going to push some people out.

http://www.businessinsider.com/source-michelle-caruso-cabrera-dumped-ale...

 

Wed, 12/01/2010 - 17:34 | 769723 NoBull1994
NoBull1994's picture

Build and they will come....  But not me.

Wed, 12/01/2010 - 17:38 | 769744 Spalding_Smailes
Spalding_Smailes's picture

Exxon/Mobil was not a bad buy after all .... :-)

Wed, 12/01/2010 - 17:36 | 769734 john_connor
john_connor's picture

This country is an embarrassment.

Wed, 12/01/2010 - 17:38 | 769739 bob_dabolina
bob_dabolina's picture

I will never participate in anything GM related for the rest of my life. I have instructed my progeny to carry on with that tradition after I pass.

I wouldn't take a GM car/stock/bond if they gave it to me for FREE.

Wed, 12/01/2010 - 17:38 | 769742 RobotTrader
RobotTrader's picture

I'm sure the chicks are going to go wild for this ride...

Wed, 12/01/2010 - 17:44 | 769761 plocequ1
plocequ1's picture

Hehehehehehehehehehe.. Oh man. This is the fucking shit. Outstanding.. Uncle George says, " Yum Yum eeeeeat em up"

Wed, 12/01/2010 - 17:45 | 769771 the not so migh...
the not so mighty maximiza's picture

interesting

 

Wed, 12/01/2010 - 18:08 | 769851 patience...
patience...'s picture

Ah the Volt, gonna save Gov Motors. The real volt looks a citation rather

than the above Volt.

Wed, 12/01/2010 - 18:26 | 769908 tickhound
tickhound's picture

ah the beauty of the bubble... even the car looks real.

 

 

Wed, 12/01/2010 - 18:43 | 769990 erik
erik's picture

who is bottom center woman?

Wed, 12/01/2010 - 18:49 | 770014 cosmictrainwreck
cosmictrainwreck's picture

scrawny, ain't she? reminds me of an old girlfriend.... love tits on a thin girl

Wed, 12/01/2010 - 22:59 | 770630 Cursive
Cursive's picture

Audrinna Patridge (wife watches too much E!).

Wed, 12/01/2010 - 21:04 | 770371 nate28jf
nate28jf's picture

hypnotizing

Wed, 12/01/2010 - 22:56 | 770623 Black Friday
Black Friday's picture

You can tell by the spreads, this is definitly the bubble phase.

Wed, 12/01/2010 - 17:40 | 769754 Blano
Blano's picture

It also looks like she's leaning backwards a bit.  Not that I'm complaining, of course.

Wed, 12/01/2010 - 17:41 | 769755 Silverhog
Silverhog's picture

I must say, Michelle looks in pain in the first image. Looks like she got things under control now.

Wed, 12/01/2010 - 17:42 | 769760 RobotTrader
RobotTrader's picture

Believe it or not....

GM outperformed Tata Motors today....

 

Wed, 12/01/2010 - 17:45 | 769772 Spalding_Smailes
Spalding_Smailes's picture

Tata is having a hard time getting financing for guys buying the ultra cheap car they push in India.

This will be cleaned up quickly the march upward will continue.

Wed, 12/01/2010 - 17:43 | 769763 pragmatic hobo
pragmatic hobo's picture

ok ... very distracting ...

 

but back to the subject, any mention of car companies dumping their inventory onto fleet purchases?

Wed, 12/01/2010 - 17:47 | 769765 Silverhog
Silverhog's picture

So what was this post about stuffing something?

Wed, 12/01/2010 - 17:47 | 769779 sabra1
sabra1's picture

wouldn't be surprised if they also channel stuffed the unemployed to make the numbers look better!

Wed, 12/01/2010 - 17:47 | 769782 imapopulistnow
imapopulistnow's picture

Government Motors builds 100,000 extra cars before the midterm elections....

Wed, 12/01/2010 - 17:50 | 769789 papaswamp
papaswamp's picture

Apparently Redbox parent, Coinstar, has also been massaging numbers with a new type of sales data to make things look peachy.

http://seekingalpha.com/news/market_currents/post/62294

Wed, 12/01/2010 - 18:42 | 769978 erik
erik's picture

good catch.  increasing capacity by 100% through double installations, then comparing those numbers to the same location when it had one installation.  that is a borderline practice.

they need to break them out single kiosk vs single kiosk and double kiosk vs double kiosk, in order to get a real same store sales picture.

i smell bad things for CSTR temporarily if they are forced to do that.

Wed, 12/01/2010 - 17:58 | 769823 schrock
schrock's picture

Not knowing the auto dealer/manufacturing business how does GM force inventory onto the dealers?

Wed, 12/01/2010 - 18:01 | 769829 BORT
BORT's picture

They fired a lot of dealers in bankruptcy.  If you were a dealer and wanted to be, you may be happy to use taxpayer money to fill your lot

Wed, 12/01/2010 - 18:43 | 769989 schrock
schrock's picture

But that's the thing, I remember they reversed their decision not to dump many of the dealers they originally intended to, maybe this was the reason, to hide inventory and distort sales numbers? I just don't understand the process in which manufacturers force inventory on to the dealers.

Wed, 12/01/2010 - 20:27 | 770287 trav7777
trav7777's picture

Well they fired a lot of dealers in republican districts and those who made contributions to the Bama's opposition.

Wed, 12/01/2010 - 21:28 | 770417 New_Meat
New_Meat's picture

So kinda' Left and East coast gonna do government motors and the real country won't?

It is un-American to buy GM or Chrystler.

- Ned

Wed, 12/01/2010 - 21:25 | 770414 Citxmech
Citxmech's picture

The way it works is that part of the dealer franchise agreement states that you have to buy some certain number of cars per year.  Needless to say this can cause friction when those cars don't sell...

Wed, 12/01/2010 - 17:58 | 769824 docmac324
docmac324's picture

One word: Toyota

Wed, 12/01/2010 - 18:05 | 769826 BORT
BORT's picture

It appears that Ford is doing a similar inventory build thru September.  Anyone have October and November Numbers

From 10Q

 

September 30, 2010 and 2009, are shown below:
First Nine Months
Dealer−Owned Stocks (a)

in thousands                                       2009 2010   Over/(Under)
United States (b) 16.4% 15.0% 1.4 pts. 404 313    91

(a) Dealer−owned stocks represent our estimate of vehicles shipped to our customers (dealers) and not yet sold by the dealers to their retail
customers.

Wed, 12/01/2010 - 18:01 | 769831 Common_Cents22
Common_Cents22's picture

I sold my business to a fortune 200 a few yrs ago.  They stuffed like crazy to make their quarterly numbers.   It's like crack because once you start you can hardly stop.  Of course, this went hand in hand with 8 restructurings in 6 years.  And the CEO is still there!  unreal.   Know what their capital allocation model was for business units?  first come first serve.  No joke.   

Wed, 12/01/2010 - 18:02 | 769833 Spalding_Smailes
Spalding_Smailes's picture

How are GM sales outside the USA.... China ?

Wed, 12/01/2010 - 18:08 | 769852 tahoebumsmith
tahoebumsmith's picture

Sales in China are good!! For some reason all those little asses prefer a Buick? But that means nothing for America because they are all built in China out of Chinese parts and materials BY CHINESE WORKERS!  Talk to me about China's GM Sales when you see GM'S leaving the port in NJ heading for China.

Wed, 12/01/2010 - 19:08 | 770077 gulf breeze
gulf breeze's picture

Mao drove a Buicrap

Wed, 12/01/2010 - 18:03 | 769838 tahoebumsmith
tahoebumsmith's picture

This is exactly what is going on. It is easy to show sales when you just build cars so they can sit around and collect dust on dealer's lots. Not to mention fleet cars are showing up at auctions with only 10k miles or less on them and are only 9 months old. Smoke and mirrors.... and after the first of the year expect the 0 down, 0% interest for 84 months + up to $8000 in rebates and no payments until June deals to arrive to try to cover their tracks, compliments of Alley Bank..ie GMAC..ie TAXPAYERS!!! And good news for anybody who was involved in a run on a Target store on Black Friday? That means you have a heartbeat so you instantly qualify. You do know what GMAC stands for don't you? Give Me Another Chance...  The GDP growth we have witnessed across the board is nothing more then the re-stocking phase. Now we are back at the top of the curve so buckle into your new Escalade and hold on tight because the hill is going to steep.

Wed, 12/01/2010 - 18:09 | 769846 Spalding_Smailes
Spalding_Smailes's picture

Manufacturing/metal in Chicago is booming over the last 8 weeks.Everyone is buried.

All the suppliers/mills have nothing in stock ....

 

Got X ? 

Wed, 12/01/2010 - 18:11 | 769857 tahoebumsmith
tahoebumsmith's picture

Government stimulus is drying up! Talk to me after they are done, there will be plenty of metal lying around that you can bang your head on.

Wed, 12/01/2010 - 18:17 | 769873 Spalding_Smailes
Spalding_Smailes's picture

All new mining equipment, parts for oil drilling, single width printing presses/short run, komatsu, govt. work, g.e. wind power .... gears, rebuilds over new .....

Wed, 12/01/2010 - 19:08 | 770082 Atomizer
Atomizer's picture

Give Me Another Chance

Priceless

Wed, 12/01/2010 - 18:11 | 769848 Paul Thomason
Paul Thomason's picture

Hi, I was once employed a senior levels by these clowns.  This is the same old game, they pay dealers a wholesale bonus to buy cars from them so the numbers look better and they can recognise the revenue on their balance sheet - it is just a game of numbers - not the truth.  This is exactly the same old shit that got them into bankruptcy.

It is because accountant run the business, all they do is fuck around with the numbers with no regard for the truth.  Accountants think sales are numbers and dollars in this business, when in actual fact it is customers that buy cars - supply and demand is an unkoown concept at GM.

By the look of this I can guarantee that they are headed for the same outcome.

Accountants and lawyers running a sales business - you think they would have learned.

Wed, 12/01/2010 - 18:14 | 769868 tahoebumsmith
tahoebumsmith's picture

Been there too! They are forcing these Dealer's to take inventory in fear of losing incentives. Nothing's changed, It will be short lived and they will be begging people to buy their cars within 6 months TOPS!

Wed, 12/01/2010 - 19:30 | 770147 jkruffin
jkruffin's picture

I just finished Macroeconomics last term, and now taking Microeconomics. Let me tell you, after learning this trash, it is no wonder we are in the mess we are in these days. The entire thing is all theory and hope based. Here is an example I learned this week that made me shake my head, and it is written in the book for companies to do this:

"When price is above average variable cost, in the short
run a firm should keep on producing even though it’s making a loss. As long as a firm’s
total revenue is covering its total variable cost, temporarily producing at a loss is the
firm’s best strategy because it’s making a smaller loss than it would make if it were to
shut down."
(Colander, David C.. Microeconomics, 8th Edition. Irwin/McGraw-Hill/MBS, 092009. 344).

Now, we see why GM and a ton of other companies bleed the American taxpayer eventually with a bailout or bankruptcy cry. Our own economists tell businesses to keep producing even at a loss. I can only laugh at this reasoning. But then again, if you know you can just file bankruptcy why not keep kicking the can down the road? Right? This is exactly what companies are doing and have been for years that have failed business models.

Wed, 12/01/2010 - 18:13 | 769864 LongSoupLine
LongSoupLine's picture

News Flash:  The Bernank to take delivery of 1.2B GM vehicles to prop the stock.  He says, "Anyone know a good garage contractor?"

Wed, 12/01/2010 - 18:18 | 769889 Bartanist
Bartanist's picture

Been wondering about this. Every single car lot that I see (not only GM) is stuffed to the gills with both new and used cars.

Wed, 12/01/2010 - 18:40 | 769973 NotApplicable
NotApplicable's picture

Not only their lots, but even the neighboring empty strip mall and chain-restaurant lots next to them. It trips me up occassionally when I drive by and see a full parking lot at a defunct steak house.

Fedgov will solve this problem though, as they will simply outlaw cars on the road older than X years for some perceived safety/fuel efficiency gains.

Same with housing. Older, "inefficient" houses will be demolished. Greater good, blah, blah, blah (never mind that, as with older cars, they represent the only affordable options for the poor).

Wed, 12/01/2010 - 18:58 | 770046 ThreeTrees
ThreeTrees's picture

That would not surprise me in the least.  They've been doing it in Japan for years.  They've managed to make lightweight, hyper-efficient cars 10 to 15 years old prohibitively expensive to license and keep on the road. http://en.wikipedia.org/wiki/Motor-vehicle_inspection_(Japan)

I benefit, at least, in that I get to drive a turbocharged coupe with the steering wheel on the wrong side, with less than half the mileage of an identical chassis at equivalent cost as what I could get on the domestic market.  Far less rust too.

Wed, 12/01/2010 - 19:08 | 770078 jkruffin
jkruffin's picture

Indeed, this is what they did with regular gas years back. Came out with some crap that started forcing manufacturers to make UNLEADED only cars. Anyone else remember regular before the low end gas we use now became the only one available, and they call it unleaded? Unleaded used to be the second choice behind regular.

Wed, 12/01/2010 - 20:32 | 770300 trav7777
trav7777's picture

uh yeah, but dude, Tetraethyl Lead is some pretty toxic shit.  Great compound and all that but not a good thing to be belching into the air

Wed, 12/01/2010 - 18:21 | 769895 mauistroker
mauistroker's picture

If they get burned a second time I wonder if there'll be the will to bail them out again?

On a related note, I'm seeing totally weird stocking policy at my local Home Depot - like 10 cement mixers that cost $3,000 a piece. They might have sold one per quarter when construction was booming out here. The place is stuffed to the rafters like I've never seen, ever. Someone is confident I guess!

Wed, 12/01/2010 - 18:26 | 769917 BORT
BORT's picture

Incentive Spending Forecast

Manufacturer

Nov. 2010 Incentives

Oct. 2010 Incentives

Nov. 2009 Incentives

Change Nov. 2010 to Nov. 2009

Change Nov. 2010 to Oct. 2010

Chrysler

$3,452

$3,400

$3,550

-2.8%

1.5%

Ford

$2,942

$2,750

$2,650

11.0%

7.0%

GM

$3,350

$3,100

$4,000

-16.3%

8.1%

Honda

$2,162

$2,000

$1,350

60.1%

8.1%

Hyundai/Kia

$1,801

$1,700

$2,050

-12.1%

5.9%

Nissan

$2,764

$2,550

$2,700

2.4%

8.4%

Toyota

$2,220

$2,100

$1,650

34.5%

5.7%

Industry

$2,712

$2,550

$2,700

0.4%

6.4%

Wed, 12/01/2010 - 18:30 | 769937 pajohn
pajohn's picture

Just to set the record straight... an increase in dealer inventory is not an increase in sales. A manufacturer reports their sales as a total of vehicles RETAILED to the public, plus FLEET sales i.e. rental car company purchases. The inventory build is NOT reflected in the 169,000 monthly sales #. However, the build in inventory is a bad future indicator for GM, as what comes next is an increase in incentives to move that inventory from the dealer lots. This inventory build is especially bad moving into several traditionally weak sales months.

Wed, 12/01/2010 - 18:45 | 769997 nonclaim
nonclaim's picture

Maybe the build up was part of the IPO theater. Any prospective gullible buyer would see cars rolling out of the assembly line and think those were real sales. Just thinking aloud...

Wed, 12/01/2010 - 19:05 | 770071 jbt6561
jbt6561's picture

Actually, according to the revenue recognition policy in the info stmt,

Revenue Recognition

Net sales and revenue are primarily comprised of revenue generated from the sale of vehicles. Vehicle sales are recorded when title and risks and rewards of ownership have passed, which is generally when a vehicle is released to the carrier responsible for transporting it to a dealer and when collectability is reasonably assured.

Is this saying that revenue is recorded when the cars are shipped to the dealer?

Wed, 12/01/2010 - 19:21 | 770119 MachoMan
MachoMan's picture

That's what it says to me...

Wed, 12/01/2010 - 20:45 | 770330 obamaphobe
obamaphobe's picture

GM recognizes revenue approx two weeks prior to shipping.  The vehicle is invoiced by GM and paid for by the dealer before it hits the lot.  The retail sales number has nothing to do with revenue.  The sales numbers released today are actual retail deliveries that dealers report as sold to GM. GM's customers are dealers and rental companies. And for the record, dealers have been critically low on inventory for months.  They were not forced orders as was an all too common occurence in the past.  I wish the dealers luck, not so much for the misfits at GM.

Wed, 12/01/2010 - 18:52 | 770027 tahoebumsmith
tahoebumsmith's picture

How easy everyone forgets that the Government, I mean the taxpayers, gave the Target tramplers up to $4000 for their pos to empty all the car lots last year during the cash for clunkers program. It has been a restocking phase since then and we have gotton back to the top, nothing more then the final end to the clunkers kick the can game. Take a look at some  of the lots at this time last year...EMPTY...And now this year they are stacking them one on top of each other to have room. Probably should have kept some of the dealers the government so kindly decided to close down so at least they would have more places to store them.

Wed, 12/01/2010 - 18:56 | 770036 Downtoolong
Downtoolong's picture

By the way, I presume most people noted how GM ricocheted like a super ball off the IPO price level again last week. That’s the second time. I wonder who keeps coming to the rescue – another Arab Prince? A shill for the UAW maybe?.  

 

If it eventually falls to $30 or lower, I think We The People should play like Goldman Sachs and buy back the shares we sold to those dumb schmucks that the PD’s and Jim Cramer advised to pay a higher price. We can always sell the shares again in one of the next three or four PPO’s (Pumped Public Offerings). This would also give Mary Shapiro a chance to finally come out from under the Cone Of Silence at the SEC and solve her dilemma, i.e., how to post a big score on her resume without ruffling any feathers on Wall Street (where she undoubtedly plans to return for big bucks when her current gig is up). Solution: she could launch a massive investigation of securities fraud and stock price manipulation …against the U.S. Treasury Department.

 

Wed, 12/01/2010 - 19:33 | 770057 jkruffin
jkruffin's picture

The wife and I had to take the Colorado Z71 in to the dealership for warranty repair due to a problem with the doorlocks and windows not working. Drove it out to the dealership and the salesmen were like buzzards. Instead of trying to sell us a vehicle, they were begging to buy our truck. I told him, hell no! The wife told him the same thing. They were offering 15k for it without even driving it or looking at ( I guess they have alot of people wanting this style truck), and I only owe 6k on it at 0% financing. Once he found that out, he was offering to put me in one of his "NEW" GM cars. He was like we can take that 9k and put you in a new car for 3.9% financing and you won't owe anymore than you do now.

I had to pause and laugh at the guy. I've got a loan now for 0% and you want to sell me a vehicle at 3.9% for the same amount and you say I won't owe any more than I do now? Is that the new George Bush fuzzy math rule for Government Motors now? These people clearly need help.

The only people I saw on the entire lot were at the service department trying to get repairs. No LIE!!! The lot was empty for anyone looking to buy a new vehicle. The fact is the only buyer of GM cars is the government. Just stop by a military base and look at what all the Civil Service employees are driving, and what the officers are being driven around in. Every car is brand new almost.

Wed, 12/01/2010 - 20:49 | 770339 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

 Is that the new George Bush fuzzy math rule for Government Motors now?

NO. This is Barry math. His daddy, in the pederastistic sense, MR GEORGE SOROS told Barry to make things better for the world by stealing from dumb americanniez. Barry has no problem with doing his heroin daddys work because birth certificates only apply to racist white guys.

Barry swallows UAW cum while stealing your childrens future for UNION thugs and you throw in Bush math?

Clinton was the first real black president.

Wed, 12/01/2010 - 22:59 | 770631 deez nutz
deez nutz's picture

I would have taking the money and bought a Toyota!!

Wed, 12/01/2010 - 19:04 | 770065 bpilch
bpilch's picture

I just tried to rent a compact or subcompact car in San Diego with Hertz and they gave me a new Cadillac with 2 miles on it. I said i would prefer a smaller car, but this is what they had. I am guessing in addition to pushing cars on dealers lots, they pushed a bunch on the rental companies. Also, my local radio stations have been giving away GM cars, so some have hit the advertising budgets....

Wed, 12/01/2010 - 19:04 | 770068 jbt6561
jbt6561's picture


Actually, according to the revenue recognition policy in the info stmt,

Revenue Recognition

Net sales and revenue are primarily comprised of revenue generated from the sale of vehicles. Vehicle sales are recorded when title and risks and rewards of ownership have passed, which is generally when a vehicle is released to the carrier responsible for transporting it to a dealer and when collectability is reasonably assured.

Is this saying that revenue is recorded when the cars are shipped to the dealer?

Wed, 12/01/2010 - 19:21 | 770118 pajohn
pajohn's picture

Revenue recognition to GM takes place when vehicles are wholesaled to the dealers, but this is not the # that is reported by all car companies at the first of every month. The #s reported in the media are RETAIL and FLEET sales numbers.

Wed, 12/01/2010 - 19:26 | 770137 MachoMan
MachoMan's picture

So the monthly releases are on a different standard than their accounting?  Ok, fair enough, do you have any cite for this policy?

Wed, 12/01/2010 - 19:41 | 770183 pajohn
pajohn's picture

Retail sales reported in the media are apples. Wholesale numbers, which go to the actual company bottom line are oranges. The oranges are what really matter to the car companies bottom line, but the apples are sexier and are reported by the media..... over 30 years working for major vehicle companies, and things have always been this way.

Wed, 12/01/2010 - 19:28 | 770132 grid-b-gone
grid-b-gone's picture

The one factor not mentioned yet is that the auto industry is the only segment that still has a free pass to bundle loans knowingly made to customers with bad credit, resell those loans, and legally bet that the consumer loans will not be repaid.

Ford seems to have re-commited to building cars. GM acts as if they want to redo the past few years only with the new insight that they could have made money if they had been as shrewd as the bankers were.

Expect some excellent deals on Malibus and Cavaliers, cars geared toward youthful buyers with less-than-stellar credit scores - loans made to be bundled and shorted.

Wed, 12/01/2010 - 19:56 | 770144 tahoebumsmith
tahoebumsmith's picture

Read it and weep! Here is the truth to the Chevy Volt and see for yourself how much this vehicle is going to cost taxpayers.

http://hotair.com/archives/2010/08/01/the-value-of-a-volt/

 I know what your thinking, It's a move in the right direction and it is money well spent? Right? Wrong... Toyota introduced the EV Rav4 back in 1997 to inspire the EV future and dropped the program within 5 years. And they picked up where Ford had left off a few years earlier. Anybody notice the GE commercials showing their new EV Pods? That's right you will be able to plug into one probably everywhere once GE builds them all with subsidized dollars. All these Volts will either be leased at subvented rates to Government employees or municipalities at a mere cost of about $10k to the taxpayer for each unit. Maybe Phil Lebeau might disagree with me so I guess we will just have to wait and see.

Wed, 12/01/2010 - 20:45 | 770325 gkm
gkm's picture

Thanks TD for this article.  Very timely as I was talking with my dad last night who was mentioning how the local dealer seemed to be loaded with 2010 vehicles.  That had me wondering how GM's car sales numbers are calculated and voila you provided.

Wed, 12/01/2010 - 20:50 | 770343 Goolie
Goolie's picture

Didn't a GM exec just complain their biggest problem was they didn't have enough inventory?   I also recall an issue with GMAC/backAlly Bank that they were overstating the residual value of their cars to make the lease payments more affordable.  So when the lessee turns in his car in 3 years the taxpayer will eat the loss on the lower than expected resale.

Wed, 12/01/2010 - 21:35 | 770431 prophet
prophet's picture

STUFF IT:

Stuff is good.

Quote stuffing.

Inventory stuffing.

 

What we need is a viable narrow bank people can move to for simple bill paying.  Then the migration away from the large banks can begin.  With interest rates so low now would be the time to go after savings account market share as well.  Get busy and stop complaining!

 

 

Sun, 07/17/2011 - 03:35 | 1463302 sly99
sly99's picture

Good morning Tyler, many thanks for sharing this excellent posting (it is certainly one of my favourites on the site thus far). Have a good Sunday, Ryan @ Work Accident Compensation

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