GM Reports $1.2 Billion Loss

Nov. 16, 2009
Company says it will step up repayments of aid

General Motors Corp. reported a loss Nov. 16 of $1.15 billion since emerging from bankruptcy but said improving market conditions would allow it to repay state aid ahead of schedule.

The troubled automaker that needed massive government aid to avert collapse earlier this year said it is making progress toward reviving its fortunes, although it may suffer more losses in the coming months.

"The business has performed better than we had expected going into bankruptcy," Chief Executive Fritz Henderson said during a conference call.

GM said its results, which are not in compliance with U.S. accounting standards, showed revenues in the third quarter of $28 billion, including $26.4 billion from the "new GM" and $1.6 billion from the "old GM."

Operating results before interest and taxes for the new GM showed a loss of $261 million.
GM said its global share was 11.9% in the third quarter, up 0.3 percentage points from the first half of the year for the old GM. The company's domestic market share in the third quarter was unchanged at 19.5%.

The automaker said it was optimistic because of significant cost cuts, having slashed total structural costs for the past period by $9.1 billion.

GM said it would step up repayments of bailout aid to U.S. and Canadian governments and pay off all German government assistance by the end of the month.

The automaker said it would accelerate the repayments "in light of improving global economic conditions, stabilizing industry sales and its healthier cash position."

GM owes $6.7 billion to the U.S. Treasury and $1.4 billion to Canada for government aid to help the company emerge from bankruptcy as a new entity.

"GM plans to repay the United States, Canadian and Ontario government loans in quarterly installments from escrowed funds, beginning next month with an initial $1.2 billion payment to be made in December followed by quarterly payments," the company said in a statement releasing preliminary financial results.

Henderson said the company plans to repay the U.S. and Canadian loans within two years and could make a decision by June 2010 to fully repay at that time.

"If the business is in reasonable condition and the funds are there, we could find ourselves fully repaying the loan" by June 2010, he said.

In any case, the repayment will repay ahead of the scheduled payoff date of July 2015.

Copyright Agence France-Presse, 2009

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