General Motors Corp. reported a first-quarter net loss April 20 of $1.1 billion, reflecting the difficult business conditions described by the auto giant in last month's profit warning. The loss excluding special items and restructuring costs amounted to $1.48 a share, a penny better than most Wall Street forecasts. The loss including special items was $1.95 per share. The special items include charges for restructuring in Europe, U.S. job cuts and factory closings, as well as tax adjustments. Without these costs, the adjusted loss reported by GM was $839 million.
The results compared with a profit of $1.2 billion in the same period a year ago. GM said revenue fell year over year in the quarter by 4.3% to $45.8 billion. The company's North American division dragged down the overall results for the world's biggest automaker with a loss of $1.3 billion, compared with a $401 million profit a year ago.
"This deterioration reflects lower sales and production volumes, a tougher pricing environment, an unfavorable sales mix and a continuing, large health care burden," GM said. GM pleaded with union officials last week to help spread the burden of rising health care costs, which GM predicted could reach $5.6 billion this year. The union said it wouldn't reopen the contract but would work with the structure of the current one to reduce costs.
Along with the highly publicized pension cost woes and fierce competition from the Japanese, GM has had to grapple with waning demand for its sport utility vehicles, its most profitable vehicle segment, amid record-high fuel prices.
Copyright Agence France-Presse, 2005
