posted 01-27-2006 06:17 AM         

DETROIT -- General Motors Corp. closed the books Thursday on a miserable 2005, but in the process took major steps toward downsizing its North American auto operations and resolving its long-term pension obligations at bankrupt Delphi Corp.

GM's staggering $8.6 billion loss last year was the second-worst in its history, underscoring the automaker's dismal performance in the U.S. market and its crippling problems with health care costs and excess factories.

But the huge loss was due in part to $3.6 billion in charges taken in the fourth quarter to fund the cost of factory closures and long-term pension and benefit obligations to former GM workers employed at Delphi.

The Delphi-related charge was the first evidence that GM and the United Auto Workers have made progress in talks to provide a so-called "soft landing" for thousands of Delphi workers whose jobs are on the line in bankruptcy.

GM also disclosed that it is in discussions with the UAW on "an accelerated attrition program" that could pave the way for a wave of early retirements in its hourly work force.

By some estimates, about half of GM's 105,000 blue-collar workers in the United States will be eligible to retire by 2007 with 30 years of service.

North American losses grow

The depths of GM's troubles in North America in 2005 were written in red ink -- a loss of $5.6 billion for the year, including a $1.5 billion loss in the fourth quarter alone. As a result, GM lost an estimated $1,067 on each of the 5.2 million vehicles it delivered across North America last year.

"2005 was one of the most difficult years in GM's history, driven by poor performance in North America," GM Chairman Rick Wagoner said.

Analysts said GM's performance was all the more troubling given that Ford Motor Co. had a fairly strong fourth quarter.

"In North American automotive, it is as if GM and Ford both walked outside on a rainy day -- Ford somehow came back with a suntan, while GM walked back inside soaked," said Morgan Stanley's Jonathan Steinmetz.

Wagoner, who has been under heavy pressure to turn around GM's core auto business, declined to predict when GM North America will make money again. However, the company said it expects "significant improvement" in the division's operating results this year.

The size of the improvement will depend on GM reaching its target of slashing its North American costs by $6 billion annually beginning this year.

posted 01-27-2006 06:56 AM         

What I don't understand is why the spineless Congress allows the Chinese to assess a 25% tariff on US cars to China, and assesses just a 2% charge on Chinese cars to the US. Heck...Korea doesn't even allow US cars in their country!

This reciprocal "Free Trade" sh.. has hurt the middle class auto workers and it benefits no one but our international competitors.

JMO

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Originally posted by ALLEY CAT:
Seriously,,,I wonder how/WHY GM spent mega millions running their "Red Tag Event" ads on every tv and radio station in the country during the Christmas holiday shopping season??? Giant full page newspaper ads as well. I would either see or hear those ads at least 50 to 75 times per day,,,,,who in the hell is out shopping for a new car during the holidays?

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Surprisingly, alot do. Year end sales. Huge discounts.
I bought a new truck on Dec 31st. Had made my mind up the previous day but, since I didn't buy then, they called back and offered another $1500 off if I bought on the 31st.
Funny thing is, it was a 2006 not a 2005 that they were doing this with.

posted 01-27-2006 11:39 AM         

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Originally posted by brianwlong:
...Most people think that we have some tax incentive to sell our cars. Not going to tell them otherwise, but there really is no such thing.

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