GM Reports $4.3 Billion Loss
Posted on April 7, 2010
General Motors has reported a whopping $4.3 billion loss for the second half of 2009. Car sales pretty much fell off a cliff and the government wanted its money back. Ever the optimist, CFO Chris Liddell is hopeful about the future and thinks the company will turn a profit in 2010. He plans on doing more cost-cutting and increasing sales.
"We need to make significant progress is several key areas," he said. "I don't want to sit here and predict profitability and disappoint. But there is nothing I've seen in the first quarter that changes my opinion that we could be profitable." The results posted Wednesday come as GM disclosed the first official accounting of its balance sheet since the company emerged from bankruptcy protection in July. They aren't comparable with prior years.Turnaround experts O'Keefe & Associates says that GM can be profitable this year if the company rolls out new vehicles and further reduces costs. O'Keefe thinks GM could have one to two profitable quarters this year.
The figures underline the challenge a shrunken-down GM faces in bolstering revenue after shedding brands, models and dealers. GM's global revenue was $32.3 billion in the fourth quarter; a year earlier so-called Old GM had $30.8 billion in revenue.
Mr. Liddell said GM will continue to bolster production and look for ways to reduce overhead costs. Obligations shed through bankruptcy have dramatically lowered GM's break-even point, though Mr. Liddell wouldn't disclose what that new level is.