Professor Mark J. Perry's Blog for Economics and Finance
GM sales in 2007: 9,370,000 vehicles
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
13 Comments:
I think there's a typo - Toyota only made 17 Mil last year?
Yes, thanks. Toyota made $17 billion.
I hate to quibble, but it looks like almost all of that GM loss is from some sort of one time tax expense. The difference in operating profit and profit before tax is large, but not nearly as large as the numbers that you cite suggest. I think I would find a better number to compare operational profit.
I think I would find a better number
Ding ding ding!
We have a winner.
Is it a taxation issue here and not operating / labor costs making the difference?
Can any of the big-brains who frequent this blog explain the giant gap?
--Nick
www.RightMichigan.com
Something seems strange here. Looking strictly at the reported revenue divided by the reported car sales for each company, Toyota averages $28,014 per car sold; GM averages $19,437 per car sold. These amounts have nothing to do costs/expenses, so let’s not blame the workforce, yet. Does Toyota actually sell each one of their cars, on average, for $8577 more than GM? That seems like a lot of variance unless Toyota is selling a lot of Lexuses to Chevy Aveos.
I realize this is an oversimplification of a complex business calculation, but can anyone shed a light on this?
How do you see the labor cost discrepancy effecting these statistics?
It costs GM $18K to manufacture each car. It costs Toyota $23K to manufacture each car.
I don't think this is a labor problem. As has been pointed out earlier, it appears to be a tax problem. However, I would not characterize them as "one time" tax expenses.
GM has been deferring tax expenses, but as a result of their lack of profits; they are forced to take this valuation allowance on their books.
I am not a UAW member, but I am an IATSE member...reluctantly. I have seen the UAW agreement. There are still stipulations in the agreement that have been in place since the Carter administration. ex. layoff hold-overs: there are people getting paid to sit and do absolutely nothing due to a paragraph in the old agreement. In addition, instead of UAW providing it's members with pension and health benefits (which is supposed to be the whole point of a union) the carmakers are responsible for 70% of this expense. The union needs to buck up and pay what they promise workers in the first place. This is the discrepency.
Prof. You have proved you are a fool. Just go read the footnotes in the GM statement about the one time tax adjustment!!!!!!!! Then you can make your point. All finance prople know to read the notes. Your grade F-
"Just go read the footnotes in the GM statement about the one time tax adjustment!!!!!!!! Then you can make your point. All finance prople know to read the notes."...
LOL! Hey anon @ 5:27 PM and all around fool, I guess now you are taking what GM hands out as gospel truth, eh? LMAO!
No matter if there is a typo or what. I am just sick and tired of all of this. There is corruption in government, big businesses, etc. and there is nothing that the little man can do.
As for me, I have owned four (4) GM products and two (2) Toyota products. Based upon my experience with both, I will never own another GM product. Make of that statement what you will but I have learned my lesson well. If you want a quality automobile with a lower frequency of repairs, buy Toyota.
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