2 Aug 2008

General Motors reports $US15.5bn in third quarter

2:08 pm on 2 August 2008

General Motors has reported a net three-month loss of $US15.5 billion as North American sales fell by 20%.

The company took a $US3.3 billion charge for buying out the contracts of 19,000 hourly workers who left at the end of June.

It also wrote off $US1.3bn because of reduced values of large, used cars, which cut the value of formerly leased cars owned by its financing unit, GMAC.

Without one-off charges, GM lost $US6.3bn compared with a net profit of $US891m in the same period of 2007.

It is the third biggest quarterly loss in the carmaker's history.

On 15 July, GM announced the latest stage of its restructuring plans, which include laying off thousands of workers, speeding up the closure of truck and sports utility vehicle plants, selling assets and suspending its dividend.

On Friday, the carmaker said it might offer another round of buyout and early retirement offers to its 74,000 workers in the US.

The staff cuts are needed because GM is cutting production as a result of falling sales of vehicles, especially SUVs and trucks.

General Motors is not the only company suffering from the state of the car market.

Earlier in the day, BMW warned that its profits for 2008 would be below forecasts and predicted a "difficult" 2009.

Also on Friday, Nissan reported a 42.8% fall in its three month profits.

Toyota has reported a fall in sales of larger vehicles in the US and Ford's sales of SUVs were 54% lower in July compared to the same month the year before.