General Motors may have emerged from bankruptcy, but the pared down auto maker didn't make money in the last six months of the year. It posted a $4.3 billion loss, it said Wednesday. Still, GM said, it does see the potential for profit this year.
Detroit-based GM recorded $57.5 billion in revenues during the July through December period, the first since exiting bankruptcy on July 10. It attributed the bulk of the loss to a settlement reached with the United Auto Workers over retiree health care liabilities and to a "foreign currency re-measurement loss."
The financial results show "there is still significant work to be done," said GM's Chief Financial Officer Chris Liddell. "However, I continue to believe we have a chance of achieving profitability in 2010."
An IPO Is Somewhere Around the Corner
Further, Liddell said GM remains committed to paying back billions in dollars of loans owed to the U.S. and Canadian governments by June "at the latest." The federal government loaned GM $52 billion in aid last year and has held a 61% stake in the company since it emerged from bankruptcy.
The bulk of the loan amount will be repaid when the government sells its holdings after GM stock is once again publicly traded. GM has declined to be specific about when it expects to conduct an initial public offering, saying only that it's a possibility during the second half of 2010.
GM has made two $1 billion payments -- one in December and one last month -- toward the $6.7 billion in cash it owes the U.S. Treasury.
Fewer Brands but Still No. 1
In preparing its financial statement, GM used so-called fresh-start accounting methods that allow companies to revalue assets post-bankruptcy. GM says it's the largest company ever to go through the fresh-start process, the Associated Press reported.
The new GM, now led by CEO Ed Whitacre, has pared brands and revamped its vehicle lineup in a bid to better compete against rival Ford Motor (F) and popular Asian auto makers Toyota Motor (TM) and Honda Motor (HMC). GM has shed four brands -- Saturn, Saab, Pontiac and Hummer -- and introduced new models such the GMC Terrain and Chevrolet Traverse crossover vehicles that have struck a chord with consumers. Despite fewer brands, GM remains the largest supplier of cars and trucks to the domestic market.
Its sales in March rose nearly 21% overall, including the orphaned brands, it reported earlier this month. Sales of its four remaining "core" brands -- Buick, Chevrolet, Cadillac and GMC -- rose 43%, GM said. In addition to the boost from stronger products, GM sales have benefited from an improving economy and attractive incentives, such as no-interest financing.
GM began offering incentives last month following the lead of Toyota, which has offered 0% interest loans and cheap leases to help combat a drag in sales caused by the its numerous and highly publicized safety recalls.