GM drives into US$4.3b loss
Source: Agencies |
April 8, 2010, Thursday
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Print Edition
Print Edition
GENERAL Motors Co yesterday said it lost US$4.3 billion in the second half of 2009 as it struggled to emerge from bankruptcy protection, repay government loans and cope with a severe downturn in United States sales.
However, the auto maker said it still sees a chance of being profitable in 2010.
GM's results aren't comparable to prior years. They only measure the period from July 10, when GM emerged from bankruptcy protection after shedding billions in debt, through December 31. GM said it earned US$109 million in the period from January 1 to July 9, 2009, under old accounting.
The Detroit company reported revenue of US$57.5 billion for the period. That compares with US$47.1 billion in revenues in the first half.
GM arrived at the totals using fresh-start accounting, which allows companies to completely revalue their assets after bankruptcy protection. GM said it's the largest company ever to go through the fresh-start process.
The federal government has given GM US$52 billion in aid and has owned 61 percent of GM since its emergence from bankruptcy. Most of that will be repaid when GM makes a public stock offering, but the company has pledged to repay US$6.7 billion in cash. GM made a US$1 billion payment to the US government in December and another US$1 billion payment in March. GM's new Chief Financial Officer Chris Lidell said last month that the company still hopes to repay the entire US$6.7 billion before June.
Under new CEO Ed Whitacre, since July the auto maker has shed four brands, Pontiac, Saturn, Saab and Hummer, and made a series of management changes and cut thousands of salaried employees. GM, which remains the largest car company by sales in the US, saw a slight gain in US market share in the first three months of this year compared with a year ago. Sales of some of its new crossovers, including the Chevrolet Traverse and Equinox and GMC Acadia and Terrain, have been particularly strong.
GM last reported earnings in November, when it said it lost US$1.2 billion in the third quarter of 2009.
(AP)
However, the auto maker said it still sees a chance of being profitable in 2010.
GM's results aren't comparable to prior years. They only measure the period from July 10, when GM emerged from bankruptcy protection after shedding billions in debt, through December 31. GM said it earned US$109 million in the period from January 1 to July 9, 2009, under old accounting.
The Detroit company reported revenue of US$57.5 billion for the period. That compares with US$47.1 billion in revenues in the first half.
GM arrived at the totals using fresh-start accounting, which allows companies to completely revalue their assets after bankruptcy protection. GM said it's the largest company ever to go through the fresh-start process.
The federal government has given GM US$52 billion in aid and has owned 61 percent of GM since its emergence from bankruptcy. Most of that will be repaid when GM makes a public stock offering, but the company has pledged to repay US$6.7 billion in cash. GM made a US$1 billion payment to the US government in December and another US$1 billion payment in March. GM's new Chief Financial Officer Chris Lidell said last month that the company still hopes to repay the entire US$6.7 billion before June.
Under new CEO Ed Whitacre, since July the auto maker has shed four brands, Pontiac, Saturn, Saab and Hummer, and made a series of management changes and cut thousands of salaried employees. GM, which remains the largest car company by sales in the US, saw a slight gain in US market share in the first three months of this year compared with a year ago. Sales of some of its new crossovers, including the Chevrolet Traverse and Equinox and GMC Acadia and Terrain, have been particularly strong.
GM last reported earnings in November, when it said it lost US$1.2 billion in the third quarter of 2009.
(AP)
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