DETROIT -- General Motors Corp. reported a first-quarter loss of $323
million Thursday, the sixth straight quarterly loss for the world's
largest automaker which is in the midst of an overhaul that includes
hefty job cuts within its critical North American operations.
But the loss for the January-March period was smaller than its $1.3
billion loss in the first quarter of 2005. Revenue rose 14 percent and
the loss in North America narrowed. GM's shares rose more than 9
percent in midday trading.
The automaker, which lost $10.6 billion in 2005, is in the midst of a
major restructuring that calls for cutting 30,000 jobs by 2008.
The first quarter loss amounts to 57 cents per share versus a loss of
$2.22 per share a year earlier.
Included in the first-quarter results was a one-time pretax charge of
$1 billion for expenses related to a recent settlement that requires
hourly retirees to pay more for their health care. GM must contribute
$3 billion to a fund for retiree health care by 2011.
GM said its global market share was flat compared with the first
quarter of 2005, at 13 percent. GM's U.S. sales were down 5 percent in
the January-March period.
GM said its adjusted loss, excluding special items such as the Suzuki
sale but including the health care charge, was $529 million, or 94
cents per share.
GM's struggling North American division reported a loss of $946
million, compared with a loss of $1.5 billion a year ago.
GM's financial arm, General Motors Acceptance Corp., earned $605
million for the quarter, down from $728 million a year ago as mortgage
earnings took a hit due to higher interest rates. Mortgage earnings
slipped by more than half to $206 million. GM recently completed an
agreement to sell 51 percent of GMAC to an investor group for $14
billion, but doesn't expect to record revenues from the sale until the
GM hasn't provided earnings guidance since last April, and Henderson
said the company has no plans to provide guidance for the rest of this
year. Henderson said it would be inappropriate for GM to issue guidance
until it comes to a resolution with auto supplier Delphi Corp. over
wages and other issues.
Delphi, GM's former parts division and largest supplier, wants to lower
hourly workers' wages and has asked a federal bankruptcy court to throw
out its union contracts. Delphi, GM and the United Auto Workers union
are in talks about a wage deal that could include payments from GM to
Henderson said the three parties are continuing to talk and he is
confident they will reach a resolution without a strike, which could be
devastating for GM.
"A Bankruptcy might be an option, we just have to see what happens in
the coming weeks"