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| Version 1 | Version 2 |
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| GM reports record quarterly loss | GM reports record quarterly loss |
| (about 1 hour later) | |
| General Motors (GM) has reported a record quarterly loss of $39bn (£18.5bn), due almost entirely to a massive one-off accounting charge. | General Motors (GM) has reported a record quarterly loss of $39bn (£18.5bn), due almost entirely to a massive one-off accounting charge. |
| GM said it was following accounting guidelines with respect to deferred tax assets in three countries. | GM said it was following accounting guidelines with respect to deferred tax assets in three countries. |
| Excluding the charge, GM still posted a net $1.6bn loss for July to September, compared with a $147m loss for the same period a year earlier. | Excluding the charge, GM still posted a net $1.6bn loss for July to September, compared with a $147m loss for the same period a year earlier. |
| Following the news, GM shares fell 4.9% during morning trading in New York. | |
| Tax assets | |
| GM said it was taking the charge because it had accumulated billions of dollars in potential tax credits in the US, Canada and Germany. | GM said it was taking the charge because it had accumulated billions of dollars in potential tax credits in the US, Canada and Germany. |
| GM continues to believe that its new product introductions, combined with the new GM-UAW labour agreement... will significantly improve GM's competitive position Fritz Henderson, GM chief financial officer | GM continues to believe that its new product introductions, combined with the new GM-UAW labour agreement... will significantly improve GM's competitive position Fritz Henderson, GM chief financial officer |
| The company decided that because of its losses, it could no longer count on earning enough money to use the credits before they expired. | The company decided that because of its losses, it could no longer count on earning enough money to use the credits before they expired. |
| GM recorded a net profit of $953m in the first six months of 2007 after losing more than $12bn in 2005 and 2006. | GM recorded a net profit of $953m in the first six months of 2007 after losing more than $12bn in 2005 and 2006. |
| However, accounting rules would still allow GM to claim those credits if it bounced back to profitability and could use the amounts to offset future taxes, a GM spokeswoman said. | However, accounting rules would still allow GM to claim those credits if it bounced back to profitability and could use the amounts to offset future taxes, a GM spokeswoman said. |
| The charge will not affect the company's cashflow as it undergoes a sweeping restructuring programme, GM said in a statement. | The charge will not affect the company's cashflow as it undergoes a sweeping restructuring programme, GM said in a statement. |
| Long-term outlook | Long-term outlook |
| "The company faces more challenging near-term automotive market conditions in the US and Germany," GM said. | "The company faces more challenging near-term automotive market conditions in the US and Germany," GM said. |
| US auto sales are on track for their lowest industry-wide total in almost a decade at about 16 million units. Executives at Ford Motor and Chrysler have suggested the market could slide further in 2008. | US auto sales are on track for their lowest industry-wide total in almost a decade at about 16 million units. Executives at Ford Motor and Chrysler have suggested the market could slide further in 2008. |
| GM chief financial officer Fritz Henderson said in a statement that the announced charges did not change its more optimistic "long-term automotive financial outlook." | GM chief financial officer Fritz Henderson said in a statement that the announced charges did not change its more optimistic "long-term automotive financial outlook." |
| "GM continues to believe that its new product introductions, combined with the new GM-UAW labour agreement, once fully implemented, will significantly improve GM's competitive position [in the United States]," Mr Henderson said. | "GM continues to believe that its new product introductions, combined with the new GM-UAW labour agreement, once fully implemented, will significantly improve GM's competitive position [in the United States]," Mr Henderson said. |
| A return to profitability would "better position the company to utilise tax benefits in the US and Canada in the future," he added. | A return to profitability would "better position the company to utilise tax benefits in the US and Canada in the future," he added. |