The General still in the red

GENERAL Motors has posted a whopping $US15.5 billion ($A16.6 billion) net loss for the second quarter of this year, following several one-off payments related to its North American restructuring program and the troubled GMAC finance arm of which it owns 49 per cent.

The result is even worse than that of Ford, which as we reported last week posted an all-time record $US8.67 billion ($A9.07 billion) loss for the three months to June.

Excluding the once-only charges, GM’s June quarter loss was $US6.3 billion ($A6.8 billion) – well down on the former world number one’s adjusted $US1.3 billion ($A1.4 billion) profit for the same period last year.

GM reported total revenue of $US38.2 billion ($A41.0 billion) - down 18 per cent from $US46.7 billion ($A50.1 billion) during the same quarter last year.

The company said it lost an adjusted $US4.4 billion ($A4.7 billion) before taxes and special charges in North America alone, compared with a $US92 million ($A98.8 million) profit during the same three months in 2007.

GM’s domestic performance cancelled out a $US400 million ($A429 million) profit made outside the US, giving GM an adjusted loss of $US4.0 billion ($A4.3 billion) on automotive operations – down from a $US1 billion ($A1.07 billion) profit during the same quarter last year.

Special charges for GM in the past quarter included $US3.3 billion ($A3.6 billion) for hourly employee buyouts in North America, $US1.1 billion ($A1.2 billion) for North American restructuring and capacity reduction costs and $US1.3 billion ($A1.4 billion) in charges relating to its share in GMAC, which experienced major write-downs following falling resale values for off-lease trucks and SUVs.



CEO Rick Wagoner (pictured at left, unveilling the Chevrolet Volt in Shanghai) said GM's restructuring plan, which aims to save $US10 billion ($A10.7 billion) in cash by the end of 2009, was on target.

“As our recent product, capacity and liquidity actions clearly demonstrate, we are reacting rapidly to the challenges facing the U.S. economy and auto market, and we continue to take the aggressive steps necessary to transform our US operations.

“We have the right plan for GM, driven by great products, building strong brands, fuel economy technology leadership and taking full advantage of global growth opportunities,” said Mr Wagoner.

Some 65 per cent of GM’s vehicles sales in the quarter were made outside the US, with GM’s Latin America division posting a quarterly profit of $US445 million ($A476 million) – up from $296 million ($A318 million), GM Europe making $US20 million ($A21.5 million) – down from $US315 million ($A338 million) in the June quarter of 2007 and GM Asia losing $US163 million ($A175 million) – down from a $US280 million ($A301 million) profit in 2007.

GM’s North American fortunes will not improve due to increased sales in the current quarter, with most car-makers recording serious sales volume reductions in July in the US, where domestic sales fell by 13.2 per cent to 1.1 million vehicles last month.

According to Automotive News Data Center figures, Nissan was the only one of six major car brands to sell more cars last month than in July 2007. Daimler AG (including Mercedes-Benz, Smart and Maybach) bucked the trend to be up 25.3 per cent for the month, as did BMW Group, Subaru, Suzuki and Volkswagen.

However, increasing fuel prices and a lack of fuel-efficient new models were blamed for serious sales declines by many brands, including Volvo (down 46.3 per cent), Chrysler (down 28.8 per cent), GM (down 26.1 per cent), Ford (down 17.1 per cent), Mazda (down 13.3 per cent) and even Toyota (down 11.9 per cent).

Unsurprisingly, SUVs experienced the biggest sales drop in July, with Ford SUV sales dropped 54.4 per cent in July to be down 37.0 per cent so far in 2008. Sales of the top-selling F-Series were down 43.5 per cent, the Expedition was down 57.5 per cent and the Explorer was down 51.8 per cent, while Ford’s car sales rose 7.8 per cent in July to 57,177 units.

GM’s SUV sales also fared badly in July, when its truck sales dropped by 36.4 per cent to 116,487, with sales of GM’s best-selling model, the Chevrolet Silverado, down by 29.9 per cent month-on-month.

Sales of GM cars also dropped in July, by 12.0 per cent to 116,853 units, but it was the first month since April 2001 that GM sold more cars than trucks.

After seven months of 2008, total vehicles sales in the US stand at 8.5 million – 10.5 per cent down on 2007 figures.

Toyota lowers global forecast

TOYOTA Motor Corporation (TMC) has revised downward its global sales forecast for 2008, releasing figures last week which show an anticipated 9.5 million sales worldwide for this calendar year – 350,000 units fewer than the previous estimate.

Locked in a fierce battle with General Motors for global bragging rights as the world’s largest auto manufacturer, and battling the same unfavourable economic conditions in the US as its competitors, the latest TMC forecast – which includes the Toyota, Daihatsu and Hino brands – still represents an increase over 2007.

Last year it achieved 9.37 million sales and, according to many pundits, the mantle as the word’s number one. Notwithstanding this, GM continues to claim it is the title-holder.

TMC’s expects its Japanese sales to reach 2.23 million for 2008, and overseas sales 7.27 million. Combined, the Toyota brand is forecast to reach 8.5 million sales – a 340,000 decrease on the previous estimate but still a slight increase over the 8.43 million achieved last year.

TMC also said last week that it had sold 4.82 million vehicles in the first half of 2008, which puts it about 280,000 units ahead of GM.

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