April 7, 2010 / 2:10 PM / 8 years ago

UPDATE 4-GM posts $4.3 bln loss, says 2010 profit possible

 * GM loss from July 10 to end-2009 totals $4.3 bln
 * GM says believes profit possible in 2010
 * Fresh start accounting paves way for IPO
 (Adds details on cash flow, global sales and market share)
 By Soyoung Kim and Bernie Woodall
 DETROIT, April 7 (Reuters) - General Motors Co [GM.UL]
posted a net loss for 2009, but said it was possible to make a
profit this year and that it was laying the foundation to
return to public ownership.
 GM reported a $4.3 billion 2009 net loss covering the
period from its emergence from bankruptcy in July through the
end of the year in the automaker's first full account of its
new balance sheet as a restructured company.
 The automaker said it had repaid $2.8 billion of its loans
from the U.S. Treasury and Export Development Canada by the end
of March and planned to repay the remaining $5.6 billion by
June "at the latest."
 GM, which received $50 billion of U.S. taxpayer support for
the restructuring, has aimed to move faster to jump-start sales
and launch an initial public offering that would allow the U.S.
government to reduce its majority stake in the automaker.
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 To read a Breakingviews column on GM, see: General Motors'
 new start not as fresh as it looks [ID:nN07128445]
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 GM Chief Financial Officer Chris Liddell said he was
"incredibly encouraged" by the company's progress in the first
quarter toward a profit in 2010 and said GM would never again
find itself in the financial position it experienced before the
bankruptcy.
 "There is nothing that I've seen in the first quarter --
which you'll see in a month's time -- that changes my opinion
that there is a good chance that we will be profitable this
year," Liddell said in a conference call.
 After accumulating losses of about $88 billion from 2005
through the first quarter of 2009, GM's predecessor company
fell into a government-supported bankruptcy. The U.S. Treasury
currently holds a stake of more than 60 percent in the new GM.
 The U.S. Treasury expects GM eventually to be strong enough
to attract sufficient investment and return to profitability.
It had no comment on GM's financial statement on Wednesday.
 GM GENERATES CASH FROM JULY-DECEMBER
 "I think they've got a modest to good chance of becoming
profitable in one of the quarters this year," said Mike
Boudreau, of the turnaround firm O'Keefe & Associates, citing
improvements in the economy and reduced structural costs.
 GM generated $1 billion of operating cash during the period
from its emergence from bankruptcy until the end of the year,
but said significant work remained.
 In the results released on Wednesday, GM said its losses
from July to the end of 2009 included a $2.6 billion pretax
loss related to a United Auto Workers union retiree healthcare
program and $1.3 billion for foreign currency adjustments.
 For the fourth quarter, GM reported a $3.4 billion net loss
and revenue of $32.3 billion.
 GM ended 2009 with $36.2 billion in cash, compared with
$14.2 billion at the end of 2008.
 The restructuring helped the new GM eliminate debt and
build its cash, but the automaker's sales overall remain under
pressure after its elimination of unprofitable brands.
 GM is shutting down the Pontiac, Saturn and Hummer brands
and has sold the Swedish Saab brand to Spyker Cars SPYKR.AS.
 The automaker's U.S. sales were up 17 percent in the first
quarter from a year earlier when the industry was hitting its
lowest levels since the early 1980s and GM was sliding toward
bankruptcy.
 However, GM's U.S. market share of 18.7 percent in the
first quarter was down from 19.6 percent for all of 2009, a
year in which it lost 2.5 percentage points of U.S. share.
 Chief Executive Ed Whitacre, who replaced CEO Fritz
Henderson in December, has shaken up senior management
including its sales and marketing teams in recent months to
push for a faster turnaround.
 GM's global market share dropped to 11.6 percent in 2009,
down from 12.4 percent in 2008, with sales overall at about 7.5
million vehicles last year including medium and heavy trucks.
 Liddell said GM did not need U.S. auto industry sales to
increase significantly in 2010 from last year for the company
to be profitable this year.
 U.S. auto industry sales fell to about 10.4 million
vehicles in 2009, the worst result since the early 1980s. Most
industry experts expect sales to increase to a range of 11.5
million vehicles to 12.5 million in 2010.
 (Additional reporting by David Bailey, editing by Gerald E.
McCormick and Matthew Lewis)






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