Wednesday, December 10, 2008

2007 Profit/Loss GM vs. Toyota: Same # Cars

GM sales in 2007: 9,370,000 vehicles
Toyota sales in 2007: 9,366,418 vehicles

GM profit/loss in 2007: -$38,730,000,000 (-$4,055 per car)
Toyota profit in 2007: +$17,146,000,000 (+$1,874 per car)

HT: Larry Kudlow and Sen. Tom Coburn on CNBC's "Kudlow & Company"

13 Comments:

At 12/10/2008 9:54 PM, Anonymous Anonymous said...

I think there's a typo - Toyota only made 17 Mil last year?

 
At 12/10/2008 10:02 PM, Blogger Mark J. Perry said...

Yes, thanks. Toyota made $17 billion.

 
At 12/10/2008 10:29 PM, Anonymous Anonymous said...

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.

 
At 12/11/2008 2:02 AM, Blogger wcw said...

I think I would find a better number

Ding ding ding!

We have a winner.

 
At 12/11/2008 8:30 AM, Blogger RightMichigan.com said...

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

 
At 12/11/2008 9:25 AM, Blogger Walt G. said...

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?

 
At 12/11/2008 5:19 PM, Anonymous Anonymous said...

How do you see the labor cost discrepancy effecting these statistics?

 
At 12/11/2008 11:45 PM, Anonymous Anonymous said...

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.

 
At 12/12/2008 7:07 AM, Anonymous Anonymous said...

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.

 
At 12/14/2008 5:27 PM, Anonymous Anonymous said...

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-

 
At 12/15/2008 3:59 AM, Blogger 1 said...

"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!

 
At 1/14/2009 7:35 PM, Anonymous Anonymous said...

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.

 
At 3/13/2009 11:35 PM, Blogger G-Man said...

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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