And B&E’s Karan Mehrishi analyses why...
It was insane! I had five American companies with a combined loss above $80 billion (phew!) and not one of them – save Sprint ($29.5 billion loss) – ready to talk to me. While the $3.09 billion down Freddie Mac representatives (bouncers, I say) shoved a press release on my face, the $3.3 billion losing AMD’s US office had their PR guys (The PRactice; spelt that way, sounding totally out of a Grisham novel) call me up to question me on why I was doing this story “at this point of time,” (!!!) and that they’d never heard about B&E (I guess we don’t distribute B&E in Mars). The sub–prime hit Merrill Lynch US was even more hilarious, when they told me, “If this is related to the Bloomberg story, that’s incorrect!” And GM.
Nobody’s been picking up my phones in the US since I met Rick Wagoner (Chairman, GM) last year to get his exclusive quotes with respect to his $750 million investment in India (He’d been quite confident that “GM wanted to leverage its global resources” to succeed in “such a high growth market”). Sprint Nextel’s official global spokesperson James Fisher was quite to the point in his comments to me about why they’d suffered such a huge loss of $29.5 billion. “We have had problems with customer services, network reliability (which we have dealt with now). We have improved our services and it will take a couple of more quarters for a visible turnaround.” Dan Hesse, CEO, Sprint Nextel, spoke to the media, “Given current deteriorating business conditions, which are more difficult than I had expected to encounter, these changes will take time to produce improved operating performance.” With a subscriber base of 53.8 million subscribers in the United States, Sprint’s present losses are attributed to the writing down of the 2005 takeover of Nextel Telecom. Sprint’s market capitalisation is about $26 billion and in the last three years, the value has declined by a staggering $7 billion!
And news from motown hasn’t been worse. The world’s largest automaker, GM, has found itself in troubled waters again. As per 2007 results, GM’s reported net loss is at an astounding $38.7 billion! According to the company, the special charges, amounting to $38.3 billion in the third quarter towards valuation allowance against deferred tax assets, were the primary reasons for these astounding losses. Strong sales in emerging markets, however, led the primary business of automotive to grow substantially. GM’s revenues were $181 billion in 2007 as compared to last year’s $174 billion. According to Rick Wagoner, “We are pleased with the positive improvement trend in our automotive results, especially given the challenging conditions in important markets like the US and Germany, but we have more to do to achieve acceptable profitability and positive cash flow.”
It was insane! I had five American companies with a combined loss above $80 billion (phew!) and not one of them – save Sprint ($29.5 billion loss) – ready to talk to me. While the $3.09 billion down Freddie Mac representatives (bouncers, I say) shoved a press release on my face, the $3.3 billion losing AMD’s US office had their PR guys (The PRactice; spelt that way, sounding totally out of a Grisham novel) call me up to question me on why I was doing this story “at this point of time,” (!!!) and that they’d never heard about B&E (I guess we don’t distribute B&E in Mars). The sub–prime hit Merrill Lynch US was even more hilarious, when they told me, “If this is related to the Bloomberg story, that’s incorrect!” And GM.
Nobody’s been picking up my phones in the US since I met Rick Wagoner (Chairman, GM) last year to get his exclusive quotes with respect to his $750 million investment in India (He’d been quite confident that “GM wanted to leverage its global resources” to succeed in “such a high growth market”). Sprint Nextel’s official global spokesperson James Fisher was quite to the point in his comments to me about why they’d suffered such a huge loss of $29.5 billion. “We have had problems with customer services, network reliability (which we have dealt with now). We have improved our services and it will take a couple of more quarters for a visible turnaround.” Dan Hesse, CEO, Sprint Nextel, spoke to the media, “Given current deteriorating business conditions, which are more difficult than I had expected to encounter, these changes will take time to produce improved operating performance.” With a subscriber base of 53.8 million subscribers in the United States, Sprint’s present losses are attributed to the writing down of the 2005 takeover of Nextel Telecom. Sprint’s market capitalisation is about $26 billion and in the last three years, the value has declined by a staggering $7 billion!
And news from motown hasn’t been worse. The world’s largest automaker, GM, has found itself in troubled waters again. As per 2007 results, GM’s reported net loss is at an astounding $38.7 billion! According to the company, the special charges, amounting to $38.3 billion in the third quarter towards valuation allowance against deferred tax assets, were the primary reasons for these astounding losses. Strong sales in emerging markets, however, led the primary business of automotive to grow substantially. GM’s revenues were $181 billion in 2007 as compared to last year’s $174 billion. According to Rick Wagoner, “We are pleased with the positive improvement trend in our automotive results, especially given the challenging conditions in important markets like the US and Germany, but we have more to do to achieve acceptable profitability and positive cash flow.”
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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