General Motors, US largest automaker, posted a net loss of $3.3 billion, or $5.74 per share on Wednesday for first quarter. This is much wider than the $42 million, or 7 cents a share, loss from continuing operations it reported in the same period last year. According to GM it is due to struggles at its former finance wing GMAC, a strike at American Axle and slumping U.S. car sales.
The nation’s biggest automaker also cut its industrywide U.S. sales outlook for the year. GM disclosed earlier this week it was cutting production of some of its slow-selling trucks and SUVs.
The company said a two-month strike at American Axle and Manufacturing Holdings Inc. has cost it $800 million and 100,000 vehicles. The strike has affected 30 GM plants.
The automaker’s sales fell 1.6% to $42.7 billion, but they topped analysts’ forecasts of $40.8 billion.
In a conference call with analysts, GM President Fritz Henderson said
We do not expect the fallout from the prolonged strike to significantly affect the company’s ability to meet demand in the future, but the situation is being analyzed day to day.
Kevin Tynan, an auto analyst at Argus Research, said
As strange as it seems, this strike couldn’t have come at a better time for GM. There’s not a lot of demand out there, especially for large trucks.
GM lost $812 million in North America, compared with a loss of $208 million in the year-ago quarter. Its U.S. market share remained flat at 22 percent. The company said earlier this week that it is cutting production of some trucks and SUVs at four U.S. plants, resulting in 3,500 layoffs.
GM’s total revenue for the quarter was $42.7 billion, down from $43.4 billion a year ago. GM said revenues were up 20 percent outside North America thanks to strong growth in China, Russia, Brazil and India. Total revenue was hurt by the slowdown in North America and losses at GMAC.
1 response so far
1 Toss Away ~ Apr 30, 2008 at 9:00 pm
In 1973 GMAC and a California Chevy dealer stole from me. Had the statute of limitations not run out by 6 months, the class action lawsuit would have obtained money for me.
Since then I have purchased 9 new vehicles, none of them GM. I am considering a 10th. It won’t be a GM product. As far as I am concerned GM does not deserve my business.
It is not a good idea to steal from your customers and expect them to be happy about that.
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