Evening journal., 1922-03-06
BIG WRITE-OFFS
in GEN. MOTORS
Profit From Operations,
Turned Into $3S,6S0,770
Loss by Adjustments
SURPLUS AT END OF
YEAR, SIS, ,S14, 100

The General Motors Corporations
report OF its operations in 1921.
probably Is a noteworthy exposition
Of the extreme depression which af-
fected the automobile industry last
year. This report shows the total
business done by the company was
cut down S262,S26. 900, compared
with that OF 1920. The net earnings
from operations were S13.239. .946,
but the corporation suffered a net
loss for the year OF 3S,6SO,770. after
huge inventory and other adjust
ments. and a final deficit OF S65.459,-
066. after payment OF dividends on
all classes OF its stocks. In other
words. the surplus OF S121,273,217.
which the company reported at the
beginning Of last year. had shrunk to
S55.S14,161 by December 81 after
all write-offs.
Commenting on the report, Pierre
S dupont president OF the corpora
tion says:
'The automobile industry. In COM
mon with many other important in
dustries. has passed through a year
OF Unprecedented difficulties and
hardships. 1921 having marked a
period OF drastic defation from the
extraordinary expansion which be-
gan in 1919 and extended through
the first half Of 1920.
During the period OF this ex-
pansion. the corporation extended
its manufacturing facilities and pro-
vided for production on an enlarged
scale to meet the demands which Il
was expected would have meant
the entire abandonment OF certain
of the corporations former products,
and the change in design and i'm
provement in quality OF other lines.
which have involved heavy losses in
the liquidation OF stock and obso-
lete material.
Extraordinary adjustments have
also been made In inventories and
material commitments. so that the
corporations books at the close OF
1921 show these items at current
market values and normal in volume
with respect to nearby production
requirements.
"A statement OF earnings for 1921
would be misleading II attention
were not called to the effect OF the
losses and adjustments which oc-
CURED in units undergoing liquida-
ton and reorganization; the best
way to make this situation clear is
to consider the operations OF 1921
In the two classes;
Glass A. The divisions which are
thoroughly established and whose
product Is standardized and does not
require radical readjustment. Class
r. The divisions which were under
going reorganization and rearrange
ment of product, including som'
cases OF complete abandonment ant
liquidation.
The relative importance OF the twi
groups IS indicated by the following
comparison Of net sales in 1921 ant
Ie203
Glass A: Operating units rep
resenting the corporations stand
ardized and thoroughly established
business. Net sales 1921, S225. GEL
10; net sales 1920, S370. .2SS. 2S5.
Glass b: Operating units undergo
ing reorganization in 1921. Net sales
1921, S79.226,1S3; corporations total
business amounted to S304,4S7.243
for 1921. and net sales 1920. S197,-
O32 36S, total S567.32O.603 for 1920.
The aggregate net earnings from
operations before deducting interest,
but after all expenses OF manufac-
turing Qncluding maintenance)
selling and administration. as we'll
as ordinary taxes. insurance. depre-
citation Of plants and equipment,
were; For Glass A, S29,671,494.7O,
while for Glass r there were losses
of S16,431.547.ss. leaving net earn
ings from operations as a whole