This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7082663.stm

The article has changed 4 times. There is an RSS feed of changes available.

Version 2 Version 3
GM reports record quarterly loss GM reports record quarterly loss
(about 8 hours 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. GM's chief financial officer told the BBC its performance was "inadequate".
Tax assets 'Challenges'
Following news of the hefty loss, GM shares were down nearly 5% in late afternoon trading.
We have got to keep working very hard to improve Fritz Henderson, GM chief financial officer
"That cannot be considered adequate even with the challenges we face," Fritz Henderson told BBC World's World Business Report.
"We've got to keep working very hard to improve, to launch our great products, improve the quality of our brands, which we are doing, and take cost out of the operations, which we are doing."
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
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.
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 cash flow as it undergoes a sweeping restructuring programme.
Long-term outlook 'Uncertain outlook'
"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.
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. Executives at Ford Motor and Chrysler, GM's principal US rivals, 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." Mr Henderson said GM's goal was to move into "a more sustainable profit position" but would not speculate on how long that might take.
"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. Strong sales in emerging markets, particularly Russia, were a positive trend for the company but weak demand in Germany remained a major concern, 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. He forecast gloomier times ahead for the US mortgage market, which GM is exposed to through its residential mortgage and car insurance arm GMAC.
"We need to significantly restructure the business to staunch those losses and then frankly reassess where we go from here," he said of GMAC's future.
"But at this point I have to say that the outlook is uncertain."