[iTNerd]

General Motors Corp. reported a $38.7 billion loss for 2007 on Tuesday, the largest annual loss ever for an automotive company, but still manage to hold the number one automaker by barely 3000 leads over rival Toyota Motor Corp. With the US economy under recession, 2008 will be a nightmare for GM.

[ramie2400]

woooo...!!! man $38.7 billion thats tooo much.. and still standing..hats off to GM

[FlyingSpur]

What ????

38 BILLION ?!??!?

That's CRAZY...just a couple of months back I was doing some research for a presentation in college, dug up some information about Ford's 2006 annual loss and it came up to $12.9bn, and I was like how do these guys even stay afloat? This is insane.

[Mayavi]

Its not a one year loss... they are just using this lean year to set their books straight.

GM’s annual loss of $38.7 billion largely was due to a third-quarter charge related to unused tax credits.
The 2007 loss topped GM’s previous record in 1992, when the company lost $23.4 billion because of a change in health care accounting, according to Standard & Poor’s Compustat.
Excluding the tax charge and other special items, GM lost $23 million, or 4 cents per share, for the year, compared with a net income of $2.2 billion in 2006, beating Wall Street’s expectations. Analysts polled by Thomson Financial expected GM to post a full-year loss of 95 cents per share.

[kkr2k2]

I guess its time for some indian auto companies to keep their finances ready to lure the GM to sell some of their assets just like ford selling off jaguar and LR.

[theMAG]

Thats painful; irrespective of organization.

[RROD]

The Labor Unions are sucking the life out of GM and Ford.

[blueraven316]

http://money.cnn.com/2008/02/12/news...ex.htm?cnn=yes

In an effort to shave ongoing losses, General Motors offered lucrative buyouts Tuesday to 74,000 employees - its entire U.S. hourly workforce.

The nation's largest automaker announced the latest round of buyouts as it reported another loss on its core auto operations in the fourth quarter, which combined with charges taken earlier in the year left GM (GM, Fortune 500) with a company-record $38.7 billion net loss for 2007.

To try to stem automotive losses that have dogged the company since 2005, the company is making a range of offers, up to cash payments of $140,000 to the remaining 74,000 GM workers represented by the United Auto Workers union.

The goal is not to reduce headcount but rather to bring in new workers at a lower cost.

About 46,000 of the GM employees are eligible to retire today and they can take pension incentives worth between $45,000 to $62,500 to retire.

In addition there are inducements for those who are within five years of retirement to leave early and receive benefits.

Those who leave and agree to sever all ties with the company - including giving up lucrative pension and health care coverage - will receive a lump sum of $140,000 if they have 10 years of service. They will receive $70,000 if they have less than 10 years of service.

"We've worked with our UAW partners to ensure our employees have a variety of attractive options to consider," GM Chairman and CEO Rick Wagoner said in a statement. "The special attrition program is an important initiative that will help us transform the workforce."

The savings GM is likely to see with this offer are substantial. The Center for Automotive Research estimates that by 2011 GM's hourly workforce will be only 8% smaller than current levels - but more than four out 10 of those workers will be new hires being paid a lower wage rate.

The current veteran UAW member at GM today has an average base wage of $28.12 an hour, but the cost of benefits, including pension and future retiree health care costs, nearly triples the cost to GM to $78.21, according to the Center for Automotive Research.

By comparison, new hires will be paid between $14 and $16.23 an hour. And even as they start to accumulate raises tied to seniority, the far less lucrative benefit package will limit GM's cost for those employees to $25.65 an hour.

Lucrative buyout packages are not new at GM (GM, Fortune 500) and rival U.S. automakers Ford Motor (F, Fortune 500) and Chrysler LLC. GM offered similar deals to all its U.S. workers in 2006. That package helped it pare U.S. hourly employment by nearly 40,000 in the past two years.

Ford and Chrysler also have the provision in their new contracts to pay new hires less in salary and benefits. But their workforces are not nearly as old as the UAW membership at GM, so they may end up seeing less turnover in their hourly staff.

Ford has its own buyout offer out to all its remaining 54,000 hourly U.S. workers. The proposal was announced last month when the company reported a fourth-quarter loss. Privately owned Chrysler has offered buyout packages to hourly employees at targeted plants, but has not make a companywide offer.

Fourth-quarter results
GM unveiled its latest cost-cutting moves as it reported a narrow profit of $46 million, or 8 cents a share, excluding special items, in the fourth quarter.

The adjusted earnings were far better than the loss of 54 cents a share that analysts surveyed by earnings tracker Thomson First Call had forecast, but worse than the year-ago result of a $180 million profit, or 32 cents a share.

But the profit in the most recent quarter was due primarily to a $1.6 billion tax benefit. GM would have otherwise lost about $2.75 a share in the period excluding items, although First Call and analysts are not likely to exclude that gain when comparing results to forecasts.

Including special items, the company reported a quarterly net loss of $722 million, or $1.28 a share. That compares to net income of $950 million, or $1.68 a share, it posted in the year-ago period.

Concerns by traders that the company's actual performance was worse than it seemed at first blush sent shares down 1.7% in pre-market trading. But shares swung to a gain of 1.5% in late-morning trading after the company's call discussing its results and outlook in more detail.

The company saw strong vehicle sales, as automotive revenue hit a record $46.7 billion, easily topping forecasts of $44.4 billion. But the company's automotive profit-loss performance took a step backwards most of its regions around the globe.

The company posted a $803 million fourth quarter pretax loss in its auto unit, compared to a narrow $8 million profit on that basis a year earlier. The worsening performance was due to its core North American operations, where industrywide sales were weak in the period. North American plants lost $1.06 billion in the period on that basis, compared to only a $129 million loss a year earlier.

The company also saw pretax losses grow in its European operations and profits decline in the Asia-Pacific region that has become increasingly important for the company's fortunes. But improved pretax profits in GM's Latin America-Africa-Middle East region more than balanced out the worsening performance in the other overseas regions.

[rajismine]

GM had made a Net loss of $38.96 Billion in its 3Q itself ending Sep 07. Infact they were much better in 4Q with a loss of $722 Million. Here is the reason for this in 3Q:- "$39B reported loss driven by $39B valuation allowance on deferred tax assets". So its not much of the usual business that was to be blamed. As such they dont do very well in 3Q anyways....

[motorheadinc]

WOW!!!!
too much financial terms flying over my head here.
can some one take time out to explain all this.

I am all ears

[GTO]

Mind-boggling number until you read:

Excluding the tax charge and other special items, GM lost $23 million,

This is nothing but an accounting strategy. Don't pay too much attention to it.

[prabuddhadg]

I had read somewhere that the GM Annual budget is larger than that of many developing nations.