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GM posts biggest annual US auto loss
By DEE-ANN DURBIN, Associated Press
Tuesday, February 12, 2008

DETROIT -- General Motors Corp. reported a $38.7 billion loss for 2007 on Tuesday, the largest annual loss ever for an automotive company, and said it is making a new round of buyout offers to U.S. hourly workers in hopes of replacing some of them with lower-paid help.
       
The earnings report and buyout offer came as GM struggles to turn around its North American business as the economy weakens.
But GM Chairman and Chief Executive Rick Wagoner said that the company made significant progress in 2007, reducing structural costs in North America, negotiating a historic labor agreement and growing aggressively in Latin America and Asia.
During a conference call with analysts and media, Chief Financial Officer Fritz Henderson said 2008 will be difficult, but the company sees the potential for significant earnings increases by 2010 or 2011 once it reduces its work force and labor costs and transfers its retiree health-care costs to a new UAW-run trust.
The Detroit-based automaker said it was offering a new round of buyouts to all 74,000 of its U.S. hourly workers who are represented by the United Auto Workers.
GM won't say how many workers it hopes to shed, but under its new contract with the UAW, it will be able to replace up to 16,000 workers doing non-assembly jobs with new employees who will be paid half the old wage of $28 per hour.
Ford Motor Co. and Chrysler LLC already have announced similar buyout offers.
Henderson said GM's offer is "reasonably attractive," and the company raised the amount it was offering to match Ford and Chrysler. He said GM wants to implement lower wages as well as lower its overall worker headcount.
"We have a substantial amount we can do in terms of transformation of the work force," he said.
GM shares rose 20 cents to $27.32 in afternoon trading.
GM's annual loss of $38.7 billion largely was due to a third-quarter charge related to unused tax credits.
The 2007 loss topped GM's previous record in 1992, when the company lost $23.4 billion because of a change in health care accounting, according to Standard & Poor's Compustat.
Excluding the tax charge and other special items, GM lost $23 million, or 4 cents per share, for the year, compared with a net income of $2.2 billion in 2006, beating Wall Street's expectations. Analysts polled by Thomson Financial expected GM to post a full-year loss of 95 cents per share.
For the fourth quarter, GM posted a loss of $722 million, or $1.28 per share, in the fourth quarter, compared with a net income of $950 million in the year-ago quarter. Fourth-quarter charges included $622 million to Delphi Corp., GM's former parts division, for its restructuring efforts, and a gain of $1.6 billion because of tax credits related to GM's pension liabilities and the sale of GM's Allison Transmission unit.
GM reported $181 billion in revenues for the year, down from $206 billion in 2006. Its automotive business saw record automotive revenues of $178 billion in 2007, up $7 billion from a year ago thanks to growth in emerging markets and favorable exchange rates.GM was profitable in every region outside North America. GM's Latin America, Middle East and Africa division reported a record $1.3 billion in earnings, more than double that of 2006. GM's Asia Pacific division earned $744 million, up from $403 million in 2006, while GM Europe reported a profit of $55 million, down from a profit of $357 million in 2006.
But GM's North American division continued to struggle, posting a $1.5 billion loss for the year, nearly identical to its $1.6 billion loss in 2006. GM's North American division also reported a loss of $1.1 billion in the fourth quarter, compared with a loss of $129 million in the year-ago quarter.
Wagoner said the weak U.S. economy and high commodity prices hurt turnaround efforts in North America. He said GM's decision to reduce low-profit sales to daily rental companies by 110,000 in 2007 also affected U.S. sales.
"We're pleased with the positive improvement trend in our automotive results, especially given the challenging conditions in important markets like the U.S. and Germany, but we have more work to do to achieve acceptable profitability and positive cash flow," Wagoner said in a statement.
GM's results also were dragged down by its 49 percent stake in GMAC Financial Services, which lost $2.3 billion in 2007. GM reported a $1.1 billion loss attributed to GMAC.
GM barely retained its title as the world's largest automaker in 2007, selling just 3,000 more vehicles than Toyota Motor Corp. GM sold a total of 9,369,524 vehicles worldwide, up 3 percent from the year before.

http://www.dailygazette.com

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GM’s $39B loss is U.S. auto record
Red ink prompts new round of buyouts for hourly workers
BY DEE-ANN DURBIN The Associated Press

    DETROIT — For all the good in GM’s 2007 results — the near-record worldwide sales, the reduction in labor costs and in retiree health obligations — there is no getting around the $38.7 billion in red ink.
    The largest annual loss in the history of the auto industry signals that even with a garage full of hot vehicles and a historic new labor contract, GM has little hope of making a profit again before 2010 as the weak U.S. economy and competition eat away at its gains.
    GM reported the record-setting loss on Tuesday and promptly offered a new round of buyouts to 74,000 U.S. hourly workers in hopes of replacing some of them with lower-paid employees.
    Chairman and Chief Executive Rick Wagoner said the company made signifi - cant progress last year, reducing structural costs in North America, negotiating a new agreement with the United Auto Workers and expanding aggressively in emerging markets such as Latin America and Asia.
    The company managed to hold onto its title as the world’s largest automaker last year — selling just 3,000 more cars than Toyota — and was profitable in every region outside North America. It introduced hit products such as the Chevrolet Malibu and a trio of new crossovers.
    But GM was hit by continuing losses in its home region, obligations to its former parts division Delphi Corp. and troubles at its partly owned GMAC Financial Services, which is reeling from the U.S. mortgage crisis.
    “We’re pleased with the positive improvement trend in our automotive results, especially given the challenging conditions in important markets like the U.S. and Germany, but we have more work to do to achieve acceptable profitability and positive cash flow,” Wagoner said in a statement.
    In addition to the weak U.S. economy and high commodity prices, GM’s decision to reduce low-profit sales to daily rental companies by 110,000 in 2007 hurt U.S. sales, Wagoner said.
    The company doesn’t expect to see significant earnings until at least 2010 as it reduces its work force and labor costs and transfers its retiree health care costs to a new UAW-run trust.
    “We need to get all the structural costs down,” Chief Financial Officer Fritz Henderson said. “We need to step on the gas in terms of how we’re performing in the market as well.”
    GM wouldn’t say how many workers it hopes to shed or how much it expects the buyouts to cost, but under its new contract with the UAW, it will be able to replace up to 16,000 workers doing non-assembly jobs. The new employees will be paid half the old wage of $28 per hour.
    Under the offer, retirement-eligible workers could get between $45,000 and $62,500 as an incentive to retire with full pension and health benefits. Other workers will have the option to retire early or take up to $140,000 to leave with no pension or health care.
    In the U.S., workers represented by the UAW — or about 98 percent of GM’s U.S. hourly workers — will be eligible for the buyouts, GM spokesman Dan Flores said.

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In the U.S., workers represented by the UAW — or about 98 percent of GM’s U.S. hourly workers — will be eligible for the buyouts, GM spokesman Dan Flores said.

I wonder what UAW will offer them??? Another go around for the next corporation with little effect with NAFTA or any other trade agreements?.....they did nothing about the future of anyone but, did address the present and their own present pockets and their depth....

http://www.dailygazette.com

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GM cuts shifts at two plants making trucks and SUVs
BY BREE FOWLER The Associated Press

    NEW YORK — General Motors Corp. said Monday it will cut shifts at plants in Ohio and Louisiana, eliminating 1,760 jobs, as part of the automaker’s previously announced plan to reduce vehicle production due to weak demand for trucks and sport utility vehicles.
    GM spokesman Tony Sapienza said the Detroit automaker will eliminate one shift each at its Moraine, Ohio, SUV plant and Shreveport, La., truck plant, cutting production by about 117,000 vehicles.
    The Moraine plant will eliminate the second shift effective Sept. 29, affecting 1,000 of the plant’s more than 2,000 hourly and salaried workers, GM said. At Shreveport, which employs nearly 2,000 people, about 760 will lose their jobs, Sapienza said.
    The cuts bring GM’s truck and SUV production cuts to just under the 300,000 units company officials had hoped for this year, Sapienza said.
    GM already has been idling various truck and SUV production for weeks at a time to reach its goal and align its offerings with consumer demand, he said. At the same time, GM is adding shifts at plants that make the fast-selling Chevrolet Malibu and Cobalt cars.
    GM said last month that the Moraine plant and three other North American pickup truck and SUV plants would close by 2010 as part of what Chief Executive Rick Wagoner said is a permanent shift in consumer preferences to small cars and crossovers. As part of a plan to ride out the slumping market and save $15 billion through 2009, GM said July 15 that it would accelerate those closures, but the company has not revealed details.
    The local union president at the Ohio plant said the cut announced Monday was sooner than expected, and employees thought the second shift would last at least until the end of the year.
    “We did expect some kind of adjustments, but never did I expect it would be the end of September,” said Gaylen Turner, president of the International Union of Electronic Workers-Communication Workers of America Local 798.
    Record-high gas prices and a weak overall economy have led to a steep drop in U.S. sales of trucks and SUVs this year, as consumers have opted for small, more fuelefficient passenger cars or put off buying new vehicles altogether.
    GM’s U.S. sales were down about 16 percent for the first half of this year, largely as a result of a plunge in truck sales, and it’s not the only automaker facing lower demand.
    Japanese rival Toyota Motor Corp., which outsold GM by 277,532 vehicles worldwide in the first six months of this year, cut its global sales forecast earlier Monday by 350,000 vehicles to 9.5 million, blaming sluggish North American sales.
    Toyota also is shifting production from SUVs and trucks to smaller models. It said earlier this month that it plans to shut down truck and SUV production at its U.S. plants for three months starting in August, and it will start building the Prius hybrid in the U.S. for the first time in 2010.
    Ford Motor Co. last week announced plans to retool two U.S. plants to make small, fuel-efficient vehicles instead of trucks and SUVs. Ford also announced plans to bring six new small vehicles to North America from Europe by the end of 2012.
    GM shares slid 90 cents, or 7.6 percent, to close at $11 Monday. Ford shares fell 30 cents, or 5.9 percent, to $4.75, and Toyota’s U.S. shares dropped $3.28, or 3.6 percent, to $88.54.

This is gonna hurt-----     "....for you look up and know the signs for the changing seasons...."   ------have we been reading our signs for the changing of the seasons????