How GM juggled millions GM's road may get rougher

The Detriot Free Press reports:

One morning in March last year, General Motors executives conducted a conference call with Wall Street analysts to lay out some gloomy news: Shareholders could expect first-quarter losses and lower-than-expected earnings to follow.

When it was his turn, Prudential analyst Michael Bruynesteyn raised a delicate question. He asked if GM had the same sort of accounting problems that were haunting Delphi Corp.

GM's former parts unit had improperly recorded cash payments, known as rebates, from suppliers.

"Our policy is no rebates from suppliers," shot back John Devine, GM's chief financial officer. He added that the automaker "had been very clear with our suppliers that we don't do business that way.

"We think our accounting is very acceptable."

But in fact, GM had improperly recorded rebates. It later admitted that its accounting practices led GM to inflate its 2001 income by 42% -- and by lesser amounts in 2000, 2002 and 2004, errors GM attributes to honest mistakes.

GM's books are now under investigation by federal regulators and under fire from some GM investors, who claim in lawsuits that they were misled. The investigations come at a sensitive time for GM as it seeks to bolster shareholder confidence and turn a profit in North America.

I guess Enron just isn't as politically powerful.Makes you wonder what "fundamentalists" look at in a stock.