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New Economy: GM Loses $15.5 Billion, Exxon Gains That Much

Armen Hareyan's picture

This morning GM reported that it lost $15.5 Billion dollars in the second quarter. Yesterday we reported that Exxon gained $11.68 billion dollars of profit in the second quarter. I am wondering if GM's loss is the biggest ever loss by a U.S. corporation in the recent history. May be not, but Exxon's gain is. Exxon sells gasoline, GM sells cars, consumers make the decisions.

The huge loss of GM is due to consumers abruptly shifting to smaller cars and not buying big SUVs as they drink the fuel. Therefore, it is expected that all the carmakers that rely on their SUV sales will suffer greatly as the new economy is pushing the consumers to buy smaller cars.

One wonders, what do GM, Ford and the likes are thinking, when we hear about cars like Aptera which is reported to burn only one gallon of gas on 230 miles and coming up in September, ZAP car and GEM cars that will drive on electric power.

Consumers have even already heard Volkswagen and Mercedes cars that will have totally new approach and will be very efficient. Why the American car makers have not thought about these things, and if they have why so slow?

We have spoken to many families who have told that that they will rather wait few more years and drive their older cars until the new most efficient cars come out, rather than buy big SUVs and get stuck with them.

Grant family from North Carolina told us that these days due to commuting to work to a reasonable distance the entire family's gasoline payments have equaled their mortgage payment.

This is the new economy, we need to adjust or act finding new solutions.

In the meanwhile here are some highlights from GM Second Quarter Financial Results.

GM has adjusted net loss of $6.3 billion, reported net loss of $15.5 billion. The results are impacted by $9.1 billion of predominantly non-cash special items. Despite the bad new GM has sales records set in three of four regions. Q2 liquidity position is $21 billion, plus credit lines of additional $5 billion.

GM says "As announced on July 15, GM is taking operating and related actions to improve cash flow by approximately $10 billion through the end of 2009. In addition, the company has outlined plans to raise approximately $5 billion through capital markets activities and asset sales (See related news release). GM is confident that these initiatives, along with its current cash position and $4-5 billion of committed U.S. credit lines, will provide the company with ample liquidity to meet its operational needs through 2009."

Comments

Submitted by Meme (not verified) on
The Aptera Typ-1h actually is to get 130mpg in steady-state driving. 230mpg was the Mk0 prototype, which used a CVT diesel and was mostly just an empty shell -- not much in terms of safety or comfort features. 300mpg, another oft-cited number, is a marketting figure, based on the premise that the average person will get most of their energy from electricity, not gasoline. However, after the initial charge is exhausted, it only gets 130mpg, and that's the number people should actually care about when it comes to driving on long trips. On the electric side, the Typ-1e goes 120 miles on 10kWh of battery at 55mph, meaning that the Typ-1 gets about 12 miles to the kilowatt hour on electricity. So, depending on your rates, that's around ten to twenty times more cost effective than driving on gasoline. As for the other cited manufacturers, GEM makes NEVs. Zap makes crummy NEVs and a lot of hype. A NEV, or "Neighborhood Electric Vehicle", is limited to low speeds and generally has poor performance and short range. For non-Aptera non-NEVs at reasonable prices coming out in the next couple years, there's the moderate performance Subaru R1e and Th!nk City, and the higher performance Chevy Volt and Mitsubishi i-MiEV. There are also some "announced but don't hold your breath" EVs coming like the Triac and the VentureOne. If you don't mind luxury-priced vehicles the size of a clown car, there's also the Volkswagen 1L car and the Loremo. Oh, and then there's the electric Mini, and whatever Nissan is making for Project Better Place... heck, it's getting hard to keep track of them all. ;)

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