GM Loses $6 Billion in First QuarterBy Michelle Krebs May 7, 2009
By Michelle Krebs
DETROIT -- With a June 1 deadline for a finalized restructuring plan or bankruptcy filing looming, General Motors posted a $6-billion loss in the first quarter of 2009, about double what it lost in the same quarter a year ago but smaller than what analysts had forecasted.
Revenues this year were about half of last year's, reflecting the global economic downturn. GM spent $10.2 billion more than it earned.
"Our first-quarter results underscore the importance of executing GM's revised viability plan, which goes further and faster to lower our breakeven point," GM CEO and President Fritz Henderson said in the company's press statement issued Thursday morning.
"This is a defining moment in the history of General Motors," Henderson continued in the statement. "Our goal is to fix this business once and for all to position ourselves to win in the long-term."
GM's first-quarter loss puts the company's total losses since 2004, its last profitable year, at $82 billion.
At the end of the quarter, GM's cash stood at $11.6 billion, down $2.6 billion from the $14.2 billion it had at the end of December. The automaker used $10.2 billion more in cash than it generated from operations, which was partially offset by new government loans. GM has received $15.4 billion in federal aid so far.
GM's first-quarter net loss amounted to $6.0 billion, including special items, compared with a net loss of $3.3 billion in the year-ago quarter. Excluding special items, GM's adjusted net loss was $5.9 billion, compared with $381 million in the year-ago quarter. The average of analysts forecasts for GM's loss was $6.7 billion.
GM's revenue in the first quarter totaled $22.4 billion, down 47 percent from $42.4 billion a year ago. The drop was the result of GM's production volume. GM produced 1.3 million vehicles globally in the quarter, 903,000 -- or about 40 percent -- less than a year ago.
Special items included $116 million for restructuring and an $822 million charge related to Saab filing for reorganization in Sweden. Other special charges related to GMAC, Delphi, GM's North American operations and changes in its debt.
GM North America
In North America, GM lost $3.2 billion on an unadjusted basis compared with a loss of $400 million a year ago. The loss on an adjusted basis amounted to $2.8 billion versus a loss of $200 million last year.
GM's revenues in North America plummeted by 50 percent quarter-to-quarter to $12.3 billion from $24.5 billion.
GM's market share in the first quarter stood at 17.9 percent, down from 21.7 percent in the year-ago quarter.
GM Europe, an operation being eyed for takeover by Fiat, lost $2 billion (unadjusted) in the quarter, compared with a profit of $100 million a year ago. On an adjusted basis, the loss was $1.2 billion compared with a profit of $200 million.
GM noted its sales were up in Germany, as were industry sales, spurred by the government's automotive stimulus measures, including its scrappage program. But Germany's higher sales were offset by declines in other countries.
In total, GM Europe produced 46 percent fewer vehicles than a year ago which hurt the automaker's financial performance as did unfavorable currency exchanges and commodity hedging. GM said it improved the mix and pricing of its vehicles in the quarter, thanks largely to the new Opel/Vauxhall Insignia and structural cost cuts.
GM's market share slipped to 8.9 percent from 9.6 percent.
GM's Asia-Pacific operations lost $21 million in the quarter, compared with a profit of $310 million in the year-ago quarter. Revenues fell to $2.4 billion from last year's $5.3 billion.
In China, GM's sales were up 17 percent, due to aggressive government stimulus and strong performance by GM's operations there, a partnership with SAIC and Wuling. However, sales in most other countries of the region fell, causing drops in production and revenue.
In Korea, struggling GM Daewoo, which is seeking government help, saw revenue drop due to a decline in exports to its major markets.
GM's market share dipped to 8 percent from 6.9 percent.
GM's operations in Latin America, Africa and the Middle East (GMLAAM) was the only region showing any black ink. The region eked out a profit of $16 million (unadjusted) compared with a profit of $500 million a year ago. On an adjusted basis, it earned $42 million versus $500 million.
Revenues fell to $3.4 billion compared with $4.8 billion a year ago as GM produced 24 percent fewer vehicles than in the year-ago quarter.
Sales in Ecuador and Peru rose to new records. GM boosted market share in those countries as well as Colombia, Venezuela, Egypt, Keny and North Africa. GM's market share in the region edged lower to 16.9 percent from 17.6 percent.