Hi Bubba, <<How does that work into the balance sheet?>>
My guess is probably not as good as yours but I guess GM continues to run production and replenish inventory because their union contract effectively says they need to pay out the contract to their workers until sometime this year if they are made redundant. There will be redundancies galore when GM is able to do so economically.
My guess is that the gross unit sales numbers are propped up, gross revenue numbers are supported, net sales decline, profit on sales disappear, and financing division (never mind nominal zero rate, the rate is never-the-less positive) makes a profit on the difference between the effective real financing rate and obligation-backed securities rate less commissions up n' down the feeding chain.
All thanks to the benighted Maestro Greensputin, and another US family's private balance sheet is put to waste, just for the sake of recycling some bits and pieces of paper to make the aggregate GDP go up by 0.x% after inflation adjustment but before they remove the food/energy component of the inflation %.
... and since more and more of the auto parts are produced overseas by relocated and/or invested/contracted factories overseas, productivity indices go up at GM, allowing the Maestro to chant 'everything is still on course', without precisely explaining 'on course for where?'
Well, it is my guess, and just a guess.
Chugs, Jay |
