10 Nov 2008

Heavy losses by GM and Ford

6:09 am on 10 November 2008

The two biggest carmakers in North America report heavy losses.

General Motors lost $US4.2 billion in the September quarter and says it will run out of cash in the first half of next year if economic and market conditions do not improve.

GM will cut jobs and costs and has also suspended merger talks with Chrysler to focus on current issues.

It says about 3,600 workers will be laid off indefinitely early next year as production is slowed at 10 plants.

Meanwhile, Ford lost $US2.98 billion during the same period, and intends to cut salary-related expenses in North America by another 10%.

GM and Ford burned through $US14.6 billion in cash between them in the quarter.


GM posted a third-quarter net loss of $US2.5 billion, compared with a loss from continuing operations of $US42.5 billion a year ago.

Revenue fell to $US37.9 billion from $US43.7 billion in the same period in 2007. GM said it would shed white-collar jobs and cut $US2.5 billion in capital spending in 2009.

Meanwhile Ford's revenues fell to $US32.1 billion, down from $US41.1 billion in the third quarter of 2007, as vehicle sales in the US plunged.

Shares in Ford have fallen more than 70% in 2008, hitting a 26-year low in October.

GM warned on Wednesday the industry faced meltdown after a "near collapse" in demand for cars.