GM reports $1.2B 3Q loss, shows progress

DETROIT (AP) — General Motors Co. says it lost $1.2 billion from the time it left bankruptcy protection through Sept. 30, far better than it has reported in previous quarters and a sign that the auto giant is starting to turn around its business.

The company also says it will begin repaying $6.7 billion in U.S. government loans with a $1.2 billion payment in December. It could pay off the full amount by 2011, four years ahead of schedule, but the money will come from funds loaned by the government.

GM said its improved performance was fueled by new products including the Chevrolet Camaro muscle car, and the Chevrolet Equinox and GMC Terrain midsize crossover vehicles. The company’s top sellers through October were the Chevrolet Silverado pickup truck and Impala full-size car.

Also, GM’s global presence helped the company, particularly in China, where its sales of 478,000 in the third quarter increased 6 percent over the second quarter.

“We have significantly more work to do, but today’s results provide evidence of the solid foundation we are building for the new GM,” CEO Fritz Henderson said in a statement.

The company cautioned that the earnings numbers mean little because they don’t comply with U.S. accounting standards and cover only the part of the quarter after GM left bankruptcy protection on July 10.

Even more unusual is the $79.4 billion profit the troubled automaker is reporting for the first nine days of the third quarter, when it remained under bankruptcy court protection but was able to scrap colossal amounts of debt and other obligations from its balance sheet.

“Direct comparisons are not necessarily applicable,” said Chief Financial Officer Ray Young. “You can make some judgments in terms of trends,” Young said.

Nonetheless, GM maintains the numbers show a company making progress, riding dramatically reduced structural costs to a far better performance than the $6 billion loss GM reported in the first quarter, the last full quarter for which its numbers met accounting standards.

GM took in $3.3 billion more cash than it spent for the third quarter, far better than the $10 billion the company burned through during the first quarter.

Its third-quarter revenue totaled $26.4 billion, also an improvement over the first quarter when it saw revenue drop nearly 50 percent from the same period in 2008 to $22.4 billion. Revenue was aided by sales boosts in July and August from the U.S. government’s Cash for Clunkers rebates.

GM said its global market share was 11.9 percent in the third quarter, up three percentage points from the first half of the year. The U.S. share stayed flat for the quarter at 19.5 percent.

Many customers stayed away from GM showrooms in the first and second quarters as it headed into bankruptcy protection, fearing the company wouldn’t be around to honor warranties and service their vehicles.

Young said GM accountants are in the process of cleaning up the new company’s books, revaluing assets and liabilities and changes to pension and health care costs that came from bankruptcy and a new contract with the United Auto Workers union.

GM expects to meet accounting standards when it reports full-year results for fiscal 2009, but those figures probably won’t be released until March as accountants go through the complex process of figuring out just how much the company is now worth.

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