GM posts $1.2 billion loss but points to signs of progress

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In a positive sign that General Motors Co.’s restructuring is off to a good start, the company Monday said it would begin repaying U.S. government loans later this year, ahead of what is required, and that it generated $3.3 billion in cash during the third quarter after emerging from bankruptcy.

Nevertheless, GM still lost money.

The Detroit automaker posted a $1.2 billion loss between emerging from bankruptcy on July 10 and Sept. 30.

“Some signs of progress, some signs of stability,” GM CEO Fritz Henderson said of the results. But, he added, the company is not satisfied with its performance, noting the losses.

“It’s a loss, and we cannot be satisfied with it,” said Henderson, who maintained the results “provide evidence of the solid foundation we’re building for the new GM.”

In its first financial update since emerging from bankruptcy as a new company largely owned by the U.S. government, GM also said its cash flow was a positive $3.3 billion for the July 10-Sept. 30 period.

The company earned $1.5 billion before interest, taxes, depreciation, amortization and special items.

Henderson announced plans to repay the government’s $6.7 billion loans within about two years but said that if things are going well the money could get paid back next summer.

“We feel confident that we can begin repayment of this loan,” Henderson said. “We think it’s important to show our commitment to the taxpayers that ? yes, in fact ? we will begin paying back this investment.”

GM’s results drew criticism from Republicans.

Republican National Committee Chairman Michael Steele issued a statement that said: “Today’s release of General Motors’ financial results is further proof that President Obama’s economic experiments are wrong for America. Sadly, GM has not only failed to turn a profit since the president poured $50 billion of the taxpayers’ dollars into GM’s bankruptcy restructuring, but it has actually lost $1.2 billion. As the ‘Cash for Clunkers’ program clearly demonstrated, government interference in private industry doesn’t help the companies involved and ends up greatly costing the American taxpayer.”

Despite the continued losses, today provides a moment of hope for GM and Detroit.

A year ago, GM announced a third quarter net loss of $2.5 billion that precipitated the automaker’s need for a government bailout.

GM ended 2008 with losses totaling $30.9 billion, its second biggest annual loss behind 2007, when it lost $38.7 billion.

Eventually, the U.S. Treasury would spend about $50 billion to keep GM alive and restructure the company through a government-backed bankruptcy.

GM’s cash situation during the July 10 to Sept. 30 was better than during the third quarter of 2008 when GM plowed through $6.9 billion in cash.

The results given Monday are unaudited managerial results and are not directly comparable to previous year’s results, company officials have cautioned. GM is no longer a publicly traded company yet is still making public its finances.

During the third quarter of this year, GM generated $28 billion in revenues up $4.9 billion to the revenues recognized by old GM in the second quarter of this year, the company said.

Overall, GM posted a loss of $261 million before interest, taxes and special items during the third quarter. While GM’s international operations posted a profit of $238 million, that was offset by a loss of $651 million in North America.

The company’s cash balance is $42.6 billion.

GM said it expects to have a negative cash flow during the final three months of this year for a number of reasons, including continued restructuring costs and loan payments.

Because of this, GM expects its cash balance to be materially lower than $42.6 billion.

Overall, GM posted a loss of $261 million before interest, taxes and special items during the third quarter. While GM’s international operations posted a profit of $238 million, that was offset by a loss of $651 million in North America.

The company’s cash balance is $42.6 billion.

GM said it expects to have a negative cash flow during the final three months of this year for a number of reasons, including continued restructuring costs and loan payments.

Because of this, GM expects its cash balance to be materially lower than $42.6 billion.