GM today reported a loss for the third quarter of $1.6 billion, including special items and an offsetting tax-rate adjustment. These results compare with net income of $315 million, or $0.56 per share, in the third quarter of 2004.
GM attributed the results, led by massive losses in its North American operations of $1.6 billion, to lower production volumes, continued increases in health care costs, higher material costs, and a shift in buyer demand mix away from full-sized sport utility vehicles.
To reduce its structural costs and stop the bleeding, GM and the United Auto Workers announced a tentative agreement early today that would reduce GM’s health-care costs significantly. GM also indicated that it would reduce its manufacturing employment by 25,000 or more jobs by 2008, while committing to full capacity utilization of its plants.
GM’s global market share in the third quarter dropped to 14.6% from 15.4% in the same period the year before. Market share in North America dropped sharply from 28.5% in the third quarter of 2004 to 25.6% for the same period this year.
The brightest spots in GM’s picture is GMAC, which continues to see its financial services businesses grow, and the Asia Pacific and Latin America, Africa and Middle east regions, both of which saw revenue and marketshare growth quarter to quarter.
|GM Third Quarter 2005 Select Results|
|Entity||Net income ($ Million)||Market Share (%)|
|3Q 2004||3Q 2005||3Q 2004||3Q 2005|
|Total Global Automotive Operations||-219||-1,600||15.4%||14.6%|
|Latin America, Africa, Middle East||27||25||17.2||17.5|