GM Posts $9.6 Billion Loss for Q4

Company could need up to another $22.6 billion in government loans

General Motors on Feb. 26 reported a whopping $9.6 billion loss in the fourth quarter which pushed its 2008 loss to $30.9 billion. GM said the results reflected the global economic crisis and industry-wide collapse in vehicle demand, and warned that 2009 will also be a "challenging" year.

"2008 was an extremely difficult year for the U.S. and global auto markets, especially the second half," CEO Rick Wagoner. "These conditions created a very challenging environment for GM and other automakers, and led us to take further aggressive and difficult measures to restructure our business. We expect these challenging conditions will continue through 2009, and so we are accelerating our restructuring actions."

"The revenue decline was predominantly due to the precipitous drop in sales amid record low consumer confidence in the United States and sharply lower sales across all of GM's operating regions due to economic turmoil in the global markets," GM said.

GM, which lost its title as the world's largest automaker to Toyota last year, noted that global industry sales in 2008 were down 5%, or 3.6 million vehicles, versus 2007 levels, while U.S. industry sales fell by 18%, or nearly 3 million units.

After posting the sharpest decline in 29 years in 2008, U.S. auto sales are expected to fall even more dramatically to between 10 and 11 million vehicles in 2009. That would be the lowest level on a per capita basis in at least 50 years and comes after nearly a decade of sales that topped 16 million vehicles a year.

General Motors has said it could need up to another $22.6 billion in government loans, on top of the $13.4 billion approved in December in order to survive the current economic downturn.

It announced plans last week to slash 47,000 jobs worldwide amid a massive restructuring plan.

The Treasury Department has until March 31 to decide whether the massive restructuring plans submitted by GM and Chrysler are enough to ensure the long-term viability for the two auto icons.

Copyright Agence France-Presse, 2009

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