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GM reduces previously declared loss to $91 million

by Deepika Garg - November 8, 2006 - 0 comments

General Motors Corp. said Tuesday that when it announced its third-quarter earnings in October, it was not aware of the $24 million worth of loans made by its financing subsidiary. The automaker revised its previously declared loss to $91 million, or 16 cents a share, from the $115 million, or 20 cents its quarterly filing with the Securities and Exchange Commission.

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[quote=Deepika Garg]<div class="flexinode-body flexinode-1"><div class="flexinode-textarea-1"><div class="form-item">
 <p>General Motors Corp. said Tuesday that when it announced its third-quarter earnings in October, it was not aware of the $24 million worth of loans made by its financing subsidiary. The automaker revised its previously declared loss to $91 million, or 16 cents a share, from the $115 million, or 20 cents its quarterly filing with the Securities and Exchange Commission.</p>
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 <img alt="GM reduces previously declared loss to $91 million" src="http://www.themoneytimes.com/filess/GM_1_sm.jpg" /><br /><a href="http://www.themoneytimes.com/filess/GM_1.jpg">Get original file (5KB)</a>
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 <p>“We had a couple of things come in the door” after G.M. announced its preliminary earnings Oct. 25, said a G.M.A.C. spokesman, Mike Stoller. “It’s not so much a correction as it is taking care of some last-second items.”</p>
<p>GM mentioned in the filing that it is expecting to take a $200 million after-tax charge in the fourth quarter for severance packages for about 2,000 workers at two component plants that will be closed. Last month the company had announced the closure of the plants that are owned by the Guide Corp., in Anderson, Ind., and Monroe, La.</p>
<p>The two plants continue to be included in GM's financial results although Guide was spun off as a separate company in 1998. The automaker has been negotiating with the parts supplier and its unions over a cost-saving labor deal.</p>
<p>In April, GM agreed to sell a 51 percent stake in GMAC to a group of investors including Citigroup Inc. and Aozora Bank Ltd. The group is led by a private investment company Cerberus Capital Management LP. The sale is expected to be completed by year's end and bring about $14 billion to GM.</p>
<p>Financial chief Fritz Henderson said last month that the turnaround plan is benefiting GM by significant cost reductions. He said the company is aiming to reach $9 billion in annual structural cost reductions this year. GM's revenue in the latest quarter totaled $48.89 billion, compared with $47.18 billion in 2005's third quarter.</p>
<p>GM shares fell 8 cents to close at $34.62 on the New York Stock Exchange.</p>
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