Archive for 2006

Yesterday, trading was halted on GM shares pending news.

Trading of shares of General Motors Corp. was halted after regular trading ended Tuesday, pending the announcement of news.

Soon afterward, the news was revealed.

In an annual regulatory report Tuesday, GM restated financial results from 2000 through 2004 because of a litany of accounting errors. GM had said March 16 that it was delaying filing its annual report because of an internal investigation into those errors.

Also Tuesday, GM said it is restating financial results for GMAC from 2003 through the third quarter of 2005. The restatement relates to the improper classification and presentation of cash flows for certain mortgage loans.

The sale of the 51% stake in GMAC would have raised as much as $15 billion for cash strapped GM.

Easy come. Easy go, right?

“If it wasn’t GM in crisis mode and the whole feeding frenzy going on in the media, a small restatement like this wouldn’t get any attention,” Healy said.

Wow, If it wasn’t for the 40,000 plus employees whose lives have been turned upside down thanks to GM and the United Auto Workers, I wouldn’t be paying much attention to GM news these days either.

Technorati Tags: GM, GMAC, United Auto Workers, restating earnings, crisis, SEC, General Motors, annual report

We already know that GM is going to cut 40,000 jobs.

We already know that GM is offering buyouts to more than 100,000 hourly employees.

Now we find out union employees, some from GM, are getting paid to do absolutely nothing…

Despite their unprecedented efforts to cut costs, American automakers are paying thousands of union workers to do nothing.

“They clock in, they sit there and they do their thing,” said Daniel Howes, a business columnist for the Detroit News. “They read a book, play a game, watch soap operas or do whatever they do.”

And then?

“They clock out and leave,” Howes said.

It’s called the jobs bank. It was invented 20 years ago, when the industry was expanding as a way to hold onto skilled workers until a new job opens up. But these days there are no new jobs.

How much you want to bet those people still have jobs after the 40,000 are laid off and those who want buyouts are long gone?

There are an estimated 15,000 workers in the jobs bank — and that number has been growing with plant closings and layoffs at GM, Ford and auto parts maker, Delphi.

For every worker in the jobs bank, automakers spend up to $130,000 a year on wages, benefits and pensions — a total of nearly $2 billion this year alone.

Technorati Tags: GM, Ford, Delphi, jobs bank, GM, Ford, Delphi, jobs bank, $2 billion, auto industry billion, auto industry

Fidelity Investments Thursday confirmed that a laptop containing confidential information on more than 196,000 current and former employees at HP and its acquisitions was recently stolen from the company. The theft may have exposed information including the names, social security numbers and compensation details for the workers.

Though there is no evidence that the stolen information has been misused so far, Fidelity has begun sending out letters to all of the affected employees informing them about the incident and recommending follow-up action, a spokeswoman said via e-mail.

The laptop, which held personal data about participants in an HP-sponsored retirement plan, was stolen from employees who had brought it to a business meeting outside of Fidelity, according to Anne Crowley, a spokeswoman for Fidelity Investments.

It’s nice to know Fidelity follows such stringent security policies that allow such sensitive data to just “walk out the door with employees”. Where did these people go? Maybe they just “left it behind”? Did anyone check the local Starbucks?

Fidelity will however has stepped up and will reimburse anyone who may fall victim as a result of this incident… Which they should do anyway…

“If we conclude an unauthorized transaction has taken place in [an individual’s] Fidelity account as a result of this incident, we will reimburse them for account losses connected with the unauthorized transactions,” Crowley said.

Technorati Tags: Fidelity, Investments, laptop, stolen, sensitive, data, Hewlitt Packard, HP, oops

Last November, I did a post about GM laying off 30,000 employees and closing 9 plants in an attempt to “increase profitability” within the company.

Today, I read this gem:

General Motors Corp., bankrupt auto parts maker Delphi Corp. and the United Auto Workers union have agreed on a plan to provide early retirement buyouts to union members and allow up to 5,000 Delphi union members to move to GM through 2007, Delphi said on Wednesday.

Delphi said 13,000 hourly union employees would be eligible for the buyouts, with some receiving lump sum payments of $35,000.

Under the terms of the deal, which is subject to approval by a U.S. bankruptcy court, GM has agreed to take on the financial obligations for the payments.

I know they say “some” will receive lump sum payments, but if all of them receive $35,000, GM will be doling out $455,000,000 to those employees, whom might not be GM employees.

It’s nice to see them doing well enough to pay out nearly $400 million to non-employees, and agree to hire 5,000 of those non-employees, all in the midst of a bankruptcy, which usually means a company is financially insolvent.

If I was one of those 30,000 who simply got a pink-slip, I’d be a little hot under the (blue) collar right about now.

UPDATE: This is a lot bigger than originally reported.

General Motors Corp. is offering its hourly workers as much as $140,000 each to leave the company as the embattled automaker made its latest effort to cut labor costs and end billions of dollars in losses.

GM announced an agreement with the United Auto Workers union Wednesday, although it did not give the details of the offer being made to all 113,000 U.S. hourly employees. But a source familiar with terms of the offer confirms those UAW members with 10 years or more service with the automaker will get $140,000 if they agree to forsake the retiree health care coverage that has become a crippling burden for GM.

Those with less than 10 years service time will get $70,000 if they leave without the health care coverage.

If ALL of GM’s 113,000 hourly employees took the buyout, and all of them had less than 10 year of service, the deal would cost GM $7.91 billion. Where does a company that has NO money to pay creditors come up with the money to “buyout” employees?

I guess I just don’t get it.

Technorati Tags: General Motors, GM, Delphi, retirement buyouts, hire, bankruptcy, lump sum payments, financial obligations

Fannie Mae reports they found errors in the reworking of the numbers which had errors in the first place.

Embattled mortgage giant Fannie Mae disclosed Monday that it had found additional errors in the reworking of its accounting ordered by federal regulators.

The government-sponsored company, which finances one of every five home loans in the United States, said it had made “substantial progress” toward completing its accounting review but expects to miss a regulatory deadline for filing its annual financial report for the second straight year. The deadline for the filing is Thursday.

Ironic. A government-sponsored company having problems meeting a government imposed deadline to report it’s annual financial report to government regulators.

Federal regulators in 2004 accused Fannie Mae of serious accounting problems and earnings manipulation to meet Wall Street targets, and the Securities and Exchange Commission ordered the company to restate earnings back to 2001 _ a correction expected to reach an estimated $11 billion. The Justice Department is pursuing a criminal investigation.

The company does not expect to complete the reworking until the second half of this year. Fannie Mae said in its SEC filing Monday that it has completed “the process of identifying accounting issues for review.”

I don’t know about you, but I don’t think I would use the word “reworking” when the subject is earnings manipulation. But, that’s just me.

Maybe they should try reporting the numbers without manipulating them. Just an idea.

Technorati Tags: Fannie Mae, mortgage, errors, manipulation, SEC, financial