GM Reports Record $38 Billion Loss

General Motors suffered its third annual loss in a row last year, losing $38.7 billon -- a record for the U.S. motor industry, the Financial Times reported.

Strong earnings from emerging economies were offset by continuing problems in GM’s big North American and European operations.

The carmaker also said yesterday that it was considering rescuing Delphi, the bankrupt parts maker and former GM subsidiary, if Delphi failed to secure a $6.1 billon financing package for emergence from Chapter 11 bankruptcy protection.

GM’s comments on Delphi came as the carmaker reported a net fourth-quarter loss of $722 million, or $1.28 a share -- higher than analysts expected and a significant reversal from a $950 million profit a year earlier. Last year’s massive loss was mostly due to a previously announced $38.3 billon special charge related to the valuation of deferred tax assets.

GM said it was exploring alternatives for Delphi in case it was unable to obtain the $6.1 billon exit financing package.

Delphi filed for Chapter 11 in 2005 and its restructuring has been one of the biggest and most complex of any U.S. industrial company.

GM’s troubled North American operations reported a jump in fourth-quarter pre-tax losses to $1.3 billon from $30 million, owing partly to lower sales volumes and higher incentives on pick-up trucks.

Fourth-quarter losses in Europe rose to $445 million from $154 million a year earlier, due mainly to the weaker German market and unfavorable currency movements.

[KHS]

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]