WSJ Reports: General Motors Co. on Wednesday posted a $4.3 billion loss for the second half of 2009, in the first official accounting of the auto maker’s balance sheet since the company emerged from bankruptcy protection.
The postbankruptcy-court GM reported $57.5 billion in revenue for July 10 through Dec. 31. That compared with $46.8 billion for the first half of the year for so-called old GM.
But then there is this — WTF? This is sheer madness. How can this be invisible to the nation?
The pension plans at General Motors and Chrysler are underfunded by a total of $17 billion and could fail if the automakers do not return to profitability, according to a government report released Tuesday.
Both companies need to make large payments into the plans within the next five years — $12.3 billion by G.M. and $2.6 billion by Chrysler — to reach minimum funding levels, according to the report, prepared by the Government Accountability Office. Whether the companies will be able to make the payments is uncertain, the report concluded, though Treasury officials expect the automakers will become profitable enough to do so.
If either company’s plan must be terminated, the government would become liable for paying benefits to hundreds of thousands of retirees. The effect on the government’s pension insurer, the Pension Benefit Guaranty Corporation, would be “unprecedented,” the report said. The agency manages plans with assets totaling $68.7 billion, less than the $84.5 billion in G.M.’s plan alone.
The report issued Tuesday said Treasury officials were confident that G.M. and Chrysler would earn enough to allow the government to gradually sell its stakes. But the report warned that the government could push the companies out of business, consequently terminating their pension plans, if their recovery efforts failed.
“In the event that the companies do not return to profitability in a reasonable time frame, Treasury officials said that they will consider all commercial options for disposing of Treasury’s equity, including forcing the companies into liquidation,” the report said.
For those who haven’t caught on yet, is the political expedience to destroy Toyota becoming more clear to you yet?