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Monday, March 20, 2006 - Web posted at 7:25:13 GMT General Motors to record US$2 billion loss in 2005 DETROIT - General Motors Corp. will see a larger loss of US$2 billion for 2005 as the world's largest auto maker gets a truer picture of the costs of bailing out its former parts-making unit and revamping its loss-riddled North American operations. |
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GM said in a release after the market closed on Thursday that the final loss will total about US$10,6 billion. It expects to increase the charge for its exposure relating to Delphi Corp.'s Chapter 11 bankruptcy case to US$3,6bn from the previous estimate of US$2,3bn. Additionally, GM will boost its North American restructuring charge to US$1,7 billion from the previously reported US$1,3 billion to cover higher expected costs for plants the company aims to close by the end of 2008. GM also will recognise a previously reported goodwill impairment charge of US$439m at its finance arm, General Motors Acceptance Corp. The previous charge included cash payments that would be made to affected employees during the current labour agreement, while the revised charge considers GM's estimate of costs it expects to pay after the contract expires in September 2007. The biggest portion of the change, US$1,3bn for costs related to Delphi, was increased after GM "refined the range" of its potential liability for Delphi employees' compensation, GM spokesman Jerry Dubrowski said. "We've got better information" than was available when Delphi filed for bankruptcy Oct. 8, he said. Detroit-based GM is attempting to negotiate a revised labour agreement with Delphi and the UAW to help Delphi's hourly workers. The Troy-based supplier has asked the UAW and other unions to agree to pay cuts of more than 60 per cent for its 34 000 unionised hourly workers. The unions have refused. - Nampa-AP |
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